Miguel Alvarez/AFP/Getty Images
Two facilities down the street from each other — one charges $800 for an MRI and the other $450.
Two facilities down the street from each other — one charges $800 for an MRI and the other $450. Miguel Alvarez/AFP/Getty Images
On today's Planet Money:
We know how a market is supposed to work. If two stores sell the same product, and one sells it for cheaper than the other, more customers should flock to the first store and put the second store out of business. But if we're learned anything from studying health care, it's that it doesn't always follow the basic rules of economics. To find out why the market works this way, we visited Pensacola, Florida where two health care facilities down the street from each other charge very different prices for MRIs.
Hospital administrator, Mike Smith, says that's because it costs a lot more to run his facility than the stand-alone clinic down the street. The people who own that clinic, Sharon and John Sowers, say it's all about numbers. They've got bills to pay and they have no choice but to be efficient.
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