Bill Of The Month: Hospital's CT Scan Cost 33 Times An Imaging Center's : Shots - Health News Why is the price of a CT scan 33 times higher in a hospital emergency room than in an outpatient imaging center just down the street?
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Bill Of The Month: A Tale Of 2 CT Scanners — One Richer, One Poorer

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Bill Of The Month: A Tale Of 2 CT Scanners — One Richer, One Poorer

Bill Of The Month: A Tale Of 2 CT Scanners — One Richer, One Poorer

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  • <iframe src="https://www.npr.org/player/embed/598794123/600761807" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
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STEVE INSKEEP, HOST:

Today, we have a tale of two medical bills - same patient, same test, but one test cost 33 times more than the other. It's our bill of the month, part of a series with Kaiser Health News in which we examine real-world medical bills and try to make sense of them if they make any sense. NPR health policy correspondent Alison Kodjak talked with our co-host Noel King about a particular bill shown us by a listener in Florida.

NOEL KING, BYLINE: Hey, Alison.

ALISON KODJAK, BYLINE: Hey, Noel.

KING: All right, so tell us about this patient and these two very different charges.

KODJAK: Yeah. So this is a young man in Florida named Ben Hynden, and he sent us this pair of bills that were really remarkable because they show how the cost of the exact same test - a CAT scan - can be just wildly different depending on where you get it.

KING: And the only difference was location.

KODJAK: Yeah. He got two CAT scans about three months apart, and the first cost less than $300. He had that one done at an imaging center, a place that only does things like X-rays, CAT scans, MRIs. The second one, on the other hand, cost $9,000 - just about 9,000.

KING: From 300 to nine - I mean, I would laugh, but that's not funny at all. What was the different - what happened here?

KODJAK: Yeah, so this one, he had done in an emergency room, which health economists will tell you is the most expensive place to get care. But even in that context, this price difference was pretty extreme. So I went down to Fort Myers. I met Hynden, and we went around to see what we could learn.

BENJAMIN HYNDEN: Let's go see the hospital.

KODJAK: We met up at his office, and he took me on a little tour. Our first stop was the emergency room at Gulf Coast Medical Center, where he got that really expensive CAT scan.

UNIDENTIFIED PERSON #1: We're just going to take her for some bloodwork. We'll be right back.

UNIDENTIFIED PERSON #2: All right.

KODJAK: This hospital and pretty much all the hospitals in Fort Myers are owned by a company called Lee Health. Hynden says he ended up here after calling his doctor's office, worried about this nagging pain in his stomach.

HYNDEN: I was just feeling, like, really bothered. And I was like, I kind of hope nothing's wrong. Let me just call my doctor to see, you know, what he thinks.

KODJAK: But his doctor was away, and a nurse practitioner worried that Hynden could have appendicitis. But once he's at the ER, a triage nurse rules that out.

HYNDEN: She goes, you're definitely not having appendicitis; you would've had a much higher fever, much more severe symptoms.

KODJAK: But the nurse recommended he get some tests anyway, and one was this almost $9,000 CAT scan. Of course, at the time, Hynden had no idea it was going to cost that much.

HYNDEN: I mean, for me, I was - I was just shocked.

KODJAK: It turns out his insurance company had negotiated a lower price - about $5,500. And some of that was covered, but in the end, Hynden, who has a high-deductible insurance plan, is on the hook for more than $3,500.

HYNDEN: Lee Health is probably not going to be very happy that I, you know, told anyone about what they charge me.

KODJAK: Yeah.

HYNDEN: But I'm not happy with them.

KODJAK: He's not happy because just a couple of months earlier, he had the same test right up the street. So we get back in the car, and he takes me there. Fort Myers is a sprawling suburban city. We passed an Applebee's and a Costco.

HYNDEN: And then, you know, SuperTarget, and Starbucks and Moe's.

KODJAK: One thing I notice is there are buildings with the blue and green Lee Health logo on them - a lot of them. In fact, Hynden's doctor works for a practice owned by Lee Health. And then we pass by an urgent care center.

HYNDEN: Hey, look. It's part of Lee Health, too. What the heck? Man, you can't go anywhere without seeing Lee Health.

KODJAK: Less than 10 minutes from the hospital, we pull into a little office park and stop at Summerlin Imaging Center. This one's not owned by Lee Health, and it's where Hynden got his first CAT scan. I go in, and the owner, Rick Davis, shows me around.

RICK DAVIS: So anyway, this is the imaging center, and this is the control room for both CT and MRI.

UNIDENTIFIED PERSON #3: Hi, how are you?

KODJAK: Two women look through glass as a patient lies in an MRI machine.

(SOUNDBITE OF MRI SCAN)

KODJAK: Across the way, a big, round CAT scan machine is visible through another window. Davis says his prices, like the $268 he charged Hynden for his scan, are dictated by insurance companies and Medicare. Small, independent companies like his don't have power in this market. Davis points to a pile of patient statements, and they show the reimbursements from insurance companies fell - sometimes by half - in the last few years.

DAVIS: If you do not agree to take the decreases, they'll cancel your contract. So when they finally put us out of business, they can have nothing but the hospital to go to.

KODJAK: And hospital care is always more expensive than outpatient care.

KING: OK, so that's why a test would cost 33 times more at a hospital.

KODJAK: Well, that's part of the reason. So I talked to Bunny Ellerin, and she runs this Healthcare and Pharmaceutical Management Program at Columbia Business School. And here's what she says about it.

BUNNY ELLERIN: When you think about the emergency department, it's really the front door to care. They are providing 24-hour unfettered access and by law - by federal law - must treat everyone who comes in - right? - whether they have insurance or the ability to pay.

KODJAK: And then there's this virtual monopoly in Fort Myers. Lee Health owns all the hospitals and also employs many of the doctors in town, so, that gives them this power to charge pretty much whatever they want.

KING: Did you get to talk to Lee Health about this? What'd they say?

KODJAK: Well, I tried to talk to Lee Health. No one would go on tape and talk to me for the story. But a spokeswoman sent me a long statement, and she essentially echoed what Bunny Ellerin said. She says it's expensive to run an ER, so any tests performed there are going to cost more.

KING: Is the city of Fort Myers unusual in some way?

KODJAK: Well, it's a specific case, but it's not that unusual. There are other cities with dominant hospital systems. And I talked to Gerard Anderson. He's a professor of health policy and management at Johns Hopkins. And he says his research shows that cities with big hospital systems and not much competition in general have much higher prices. So on Hynden's bill, the price was $8,897 for this CAT scan, and it comes from what's called a master price list. And Anderson says hospitals mark up all the prices on the list by a lot.

KING: Yeah, but then do people actually pay those prices?

KODJAK: Not many people do. Anderson calls them fairy-tale prices. So the higher they are, though, the worse it is for consumers because insurers negotiate down from the very high first number. And so Ben Hynden, he's still on the hook for $3,500 for this test that only cost $300 just down the road.

KING: Man. NPR's Alison Kodjak, thank you.

KODJAK: Thanks, Noel.

KING: You can also share your stories with us. NPR and Kaiser Health News want to see some of your medical bills, whether they're sky-high or just interesting - bills where there's a story to tell that we can then investigate. If you want to participate, go to NPR's Shots blog. You can tell us about your experiences, and you can upload your bills. There's a form.

(SOUNDBITE OF AARON PARKS' "RIDDLE ME THIS")

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