Hold Onto Your Wallet: Survey Finds Wide 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.