Study Finds Significant Price Difference for Common Procedures at Minnesota Hospitals

Study Finds Significant Price Difference for Common Procedures at Minnesota Hospitals Photo: KSTP file

January 04, 2018 02:09 PM

There is a significant difference in price for certain common procedures depending on what state hospital a patient is at, according to a first-of-its-kind study.

The information gathered was the result of employers partnering with the Minnesota Department of Health and using the Minnesota All-Payer Claims Database (MN APCD) in order to map what's happening in health care statewide.


The study, released Wednesday, assesses the actual prices paid for hospital facility fees in the state, according to the MDH. The costs of four common procedures were compared.

According to the study, the amount insurers paid to Minnesota hospitals between July 2014 and June 2015 for a knee replacement procedure ranged from roughly $6,200 to $47,000. According to the MDH, that range represents a "nearly eight-fold difference between the lowest and highest-price hospitals."

The study found similar discrepancies with cesarean section baby delivery (ranging from roughly $4,700 to $23,000), vaginal baby delivery (roughly $4,400 to $9,600), and hip replacements ($16,100 to $33,700.)

Data from more than 1.1 billion health care claims coming from private and public payers covering more than 4.3 million people in Minnesota allowed researchers to reach the price conclusions. Roughly 100 organizations and programs provided de-identified data, or data stripped of patient identifying information, to the database.

Meanwhile, the hospitals were not identified in the study, as Minnesota law prevents the use of the database to provide such information.

Researchers said the data will hopefully help provide transparency regarding health care costs.

"Transparency in markets is key to making sure they work effectively," Stefan Gildemeister, the state health economist and co-convener of the MN APCD, said in a statement. "By some estimates, pricing failures from the lack of transparent information on health care costs contribute more than 14 percent to waste or inefficiency in today's health care spending. We hope this and other upcoming analyses on price variation in Minnesota can provide value to individuals and employers, and contribute to discussions about sustainability in health care spending growth."

The MDH reported it plans to release additional price information for other common procedures, including heart procedures and back surgery, this year.


Rebecca Omastiak

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