UnitedHealth Group Reveals Significant Variations in Diagnostic Test Pricing

UnitedHealth Group recently published a new research brief in which the company examined consumer health care spending and found significant variations in pricing for the same diagnostic tests, causing many consumers to overspend. 

Health care spend is anticipated to reach $6 trillion by 2027, about 20% of the gross domestic product causing political cry for change and many health care companies to examine their pricing. 

The research conducted by UnitedHealth Group found that vital diagnostic tests including echocardiograms, mammograms, and ultrasounds are often priced drastically differently. Among the most varied, was the cost of an echocardiogram in 2017, ranging from $210 to a steep $1830. 

“While a significant number of consumers pay low prices, over half pay considerably more for exactly the same service,” explained UnitedHealth Group in the report. 

The overpricing analysis looked at “seven groups of common, minimally-invasive, outpatient diagnostic and testing services for commercially-insured patients, including MRIs, ultrasounds, echocardiograms, and mammograms,” according to the research brief. “Prices paid by UnitedHealthcare’s commercial health plans and their members for over 12.5 million diagnostic tests in these seven groups vary from three-fold up to twenty-fold or more.” 

The company recommended that if the tests examined in their research priced above the 40th percentile were repriced to the 40th percentile, health care costs would have been reduced nearly 50% in 2017, saving $18.5 billion in overspending for consumers. Reductions in echocardiogram pricing to the 40th percentile alone would save $970 million alone, according to the research. 

“By reducing price variation, many patients would pay less out-of-pocket costs and health insurance premiums could be lower,” said UnitedHealth Group. 

The reason for varied pricing is not attributed to geographic location, predictive of provider quality or patient outcomes according to the research. UnitedHealth Group found that the most likely reason for these significant variations was due to “health care providers…incentivized to use their market power to increase prices, often resulting in overpriced services.”—Edan Stanley