Hold Onto Your Wallet: Survey Finds Wide Price Variations in Hospital Services

Research on price variations in hospital services

During 1997 and 1998, researchers at the Sunnybrook Foundation examined the charges for 16 well-defined hospital services in different parts of the United States in order to test the hypothesis that there are wide price differences for the same hospital services.

Sunnybrook is a hospital-based research organization in North York, Ontario, Canada.

Key Findings

  • As predicted, the study found a wide range in charges: the largest difference was for knee replacement surgery, which ranged from a low of $7,160 to a high of $46,985.
  • The variations cannot be explained by differences in the age, severity of disease, co-morbidity, willingness to pay or insurance status of the patient.
  • The results suggest that charges for hospital services do not follow the market discipline observed for other goods and services in society.

Funding

The Robert Wood Johnson Foundation (RWJF) supported this project through a grant of $49,579.

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