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How colonoscopies illustrate America's cost problem

June 4, 2013

    Hanna Jaquith, Daily Briefing

    In a much-discussed New York Times article last week, Elizabeth Rosenthal examined the exorbitant cost of a colonoscopy—the "most expensive screening test that healthy Americans routinely undergo."

    The fairly routine colon cancer screening racks up big bills. One Long Island hospital charges $6,385, while a New York facility charges more than $9,000. Across the country, 10 million Americans undergo the less-than-pleasant procedure each year, adding up to more than $10 billion in health care costs.

    In other developed countries, a basic colonoscopy costs just a few hundred dollars, Rosenthal notes.

    Health care experts and economists say the high price charged for colonoscopies in the United States is not the result of top-notch patient care, but rather of "business plans seeking to maximize revenue; haggling between hospitals and insurers that have no relation to the actual costs of performing the procedure; and lobbying, marketing and turf battles among specialists that increase patient fees," Rosenthal writes.

    Cheaper, less-invasive colon cancer screening methods are considered equally effective by a federal task force and are commonly used in other countries, but the colonoscopy has become the "go-to" procedure in the United States. "We've defaulted to by far the most expensive option, without much if any data to support it," Gilbert Welch of the Dartmouth Institute for Health Policy and Clinical Practice told Rosenthal.

    Rosenthal highlights the "lucrative migration" of colonoscopies from doctors' offices to outpatient surgical centers. Similarly, hospitals, drug companies, device makers, and providers have an economic incentive to charge higher prices for the procedure, while insurers have limited motivation to bargain since they can just raise premiums to cover costs, Rosenthal writes.

    "It all comes down to market share, and very rarely is anyone looking out for the patient," says Jeffrey Rice, the CEO of Healthcare Blue Book, which tracks commercial insurance payments.

    Meanwhile, patients have little reason to limit their own spending because they do not see prices until after a service if provided and generally pay only a fraction of the bill. Many patients do not even think to ask their doctors about the price of their procedures. As one patient told Rosenthal, "[I]f a doctor says you need it, you don't ask."

    On the Advisory Board blogs

    • Care Transformation Center Blog: Bonnie Jin profiles a health network that reduced Medicare readmissions to 1.62% by employing veteran medics as transition coaches.
    • Cardiovascular Rounds: Jeffrey Rakover explains how Boston Children's Hospital uses instances of clinical variation to inform changes to its care pathways.
    • Care Transformation Center Blog: Cabell Jonas and Yulan Egan offer three tips for simplifying care for medically-complex children.

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