Estimated treatment costs

Summary: North Carolina Blue Cross took a startling step about a week ago: It released in consumer-friendly form a tool specifying what it pays to providers across the state for different common procedures under contractual agreements. Why is this important? Well, common practice in the health care market is for insurance companies to keep these contract prices or negotiated prices secret — presumably because Blue Cross doesn’t want Provider A to know it’s getting paid $543 for an MRI, while Provider B is getting paid $2,357.



The range for an MRI of the lower back

Prices vary, by a lot. I did a few sample searches on simple procedures, about which we know quite a lot because of our pricing work.

Here’s a search on MRI of the lower back, without contrast, near Durham, N.C. The range:

  • $543 at Eastern Carolina Med Center, 1 Medical Dr., Benson, N.C. 27504
  • $2,138 at Moses Cone Memorial Hospital, 1200 N Elm St., Greensboro, N.C. 27401
  • $2,357 at D. L. P. Maria Parham Medical Center LLC, 566 Ruin Creek Rd., Henderson, N.C. 27536

The Medicare rate is $403. Medicare’s rate, figured by geographic location, is the closest thing to a fixed or benchmark price in the marketplace.

We have collected cash rates as low as $260 and as high as $6,221 in our pricing surveys.

The range for a screening mammogram

For a screening mammogram, digital, both breasts, the range:

  • $82 at Alamance Regional Medical Center, 1240 Huffman Mill Rd., Burlington, N.C. 27215
  • $91 at Duke University Hospital, 2301 Erwin Rd., Durham, N.C. 27710
  • $389 for Carmelo Gulotto, at D. L. P. Maria Parham Medical Center
  • $391 for Carroll Overton at D. L. P. Maria Parham Medical Center
  • $392 for D. L. P. Maria Parham Medical Center
  • $393 for Bryan Peters at D. L. P. Maria Parham Medical Center

The Medicare rate for North Carolina is $77.

We have collected cash rates as low as $50 and as high as $1,126 in our pricing surveys.

Who is Bryan Peters, and why does he get the extra $1? And who are Carmelo Gulotto and Carroll Overton?

Estimated treatment costs

And when Carroll Overton does the same mammogram at the Breast Center West in Raleigh, why does she or he receive only $330?

The tool also represents price differences for more complicated things, like knee replacements, childbirth and the like, as well as simple ones like a urine pregnancy test, which can range from $4 to $60.

It’s well worth looking at the range of payments; that wide spread (prices varying by a factor of 3, or sometimes a factor of 10 or 12) is pretty much what we’re learning via our reporting. So — in a sense — this serves to confirm a lot of what we already know, but with much greater detail and much more data.

“The average reimbursement for a kidney transplant at [Carolinas Medical Center-Main] is $106,764, compared with $159,847 at Duke University Hospital in Durham,” Ann Doss Helms wrote in The Charlotte Observer.

“The payments listed for a coronary bypass without cardiac catheterization in the Charlotte and Raleigh regions range from about $49,000 at UNC Hospitals in Chapel Hill to more than $79,000 at CMC-Northeast in Concord.”

Why do prices vary so much? It might be because a patient is sicker or harder to treat, especially in the case of surgery. But if the prices vary a lot on a simple procedure, like that mammogram or the MRI, then there has to be another explanation — usually it’s because a higher-priced provider has more power in the marketplace, or more prestige, and can thus command a higher payment.

Rates kept secret by gag clauses

Those contract rates have long been protected by gag clauses, under which the provider agrees not to disclose payment rates. So what’s up with Blue Cross suddenly revealing the prices? There are several motivators.

“Lack of transparency is a big problem in health care – it costs U.S. consumers more than $100 billion each year,” the site says. “As a health care consumer, you can use this tool to compare the cost of various health care services at facilities near you. This is important because many health plans require you to pay at least some of the cost of your care. So making sure you get the best quality and best price helps keep you and your wallet healthy. Cost estimates are averages based on historical BCBSNC claims data. Amounts listed typically include physician fees, facility fees and costs for things like anesthesia, drugs, medical supplies – as well as customer responsibility (deductible, co-pay and co-insurance). Your actual costs may be different based on variations in these factors as well as your health plan design, deductibles/co-insurance and out-of-pocket limits.”

Of course, Blue Cross was not acting in a vacuum. North Carolina had passed a transparency law in 2013, which was being put into effect, just as Blue Cross made its revelations. The state had started posting payment rates. This is what that tool looks like.

“Republican Gov. Pat McCrory signed legislation that will require his state’s hospitals and ambulatory surgery centers to disclose what they’re paid for 140 medical procedures and services,” Modern Healthcare reported in 2013. “The prices for 100 common inpatient services, 20 surgical procedures and 20 imaging procedures will be posted on the state Department of Health and Human Services website. The legislation also limits hospitals’ ability to put liens on patients’ homes and forbids state-owned hospitals from garnishing patients’ wages to recoup debts.”

So why does this matter? These Blue Cross rates apply only to people insured by Blue Cross who are going to a Blue Cross network doctor, so it doesn’t matter for many people, right?

Not so fast. If a person looking for an MRI can see that the price varies from $543 to $2,357, depending on the provider, then that person can choose a lower- or a higher-cost provider, which is important if you haven’t satisfied your deductible, or if you have a 20 percent co-insurance. That’s true even if your insurance company isn’t Blue Cross — at least you have a universe of prices to consider as the acceptable range.

You might also wonder why your insurance company is paying such wildly varying rates. And you might wonder if those varying rates enter into your sky-high premiums.

We have been saying since we were first founded in 2011 that our cash or self-pay rates pretty closely mimic the range of contract rates for the items and procedures we survey on — and which vary by as much as these Blue Cross rates for simple procedures. A cardio stress test, $100 or $2,500? Check. An MRI of the lower back, $295 or $2,500? Check.

Also, if Blue Cross gets out in front on transparency, that’s probably a pretty good public relations move.

Other points of interest: This is not that hard

Everybody in this marketplace has been saying for years that they can’t release prices — that it’s too complicated, that the prices are proprietary information, that their business prohibits such revelations.

But guess what — Boom! It’s not that hard.

Will others follow suit? Perhaps. This is fairly new, and the pressure for transparency has been stronger in some places than others. Will this be used by consumers, by providers, by other payers? Judging from our experience, it will be used by all of these parties, and more — imagine, for example, patient billing advocates, or lawyers seeking reference material for court cases, and anyone else who is interested in price.

I reached out to three separate North Carolina doctors, and none of them had had time or need to investigate the database. I’m not sure what that means. (The three are Dr. Peter Ubel at Duke University, who writes a lot about what’s wrong and what’s right with the health care system; Dr. Yousuf Zafar at Duke, who has written about the financial toxicity of cancer; and Dr. Steven Meyers, who runs, an LLC with headquarters in North Carolina.

I also reached out to Blue Cross to speak with them, but didn’t hear back. It seems from news coverage that there was a conference call about the rollout, which I didn’t know about. (I’ll update with comment.)

What’s next

It’s interesting to contemplate whether this is the first of many such revelations.

My friend Dan Munro says it is. “The fact is  while this represents great news for consumers (and a long time in coming), it could well be that the highest value isn’t to consumers at all but to the healthcare system itself. Why? Because in the course of one short week, one provider has already requested their price be lowered in order to compete more effectively in that network. That’s not surprising for all the advocates and analysts of pricing transparency,” he wrote in a post over at

“BCBSNC is only one of many payers, of course, but in terms of covered lives, they represent about 40% of the population in North Carolina. At the national level, members of the Blue Cross and Blue Shield Association (about 37 in total) either provide or administer health coverage for about 105 million Americans (roughly 1/3 of the U.S. population).

“Some said this could never happen. Others said it never would. The fact is  it just did. I’m betting other payers (every color stripe) will follow. At the very least, the pressure of pricing is clearly evident … and mounting.”

We’re aware that individual insurers have “transparency tools” on their sites, but few make them fully available to anybody who’s not a member. I wrote about one of those in-house transparency tools here — it reports only the 10 percent coinsurance, from which one can extrapolate to the full contracted pay rate.

We’re also hearing a lot about the all-payer claims database movement, which has as its goal collecting data from different payers and making that data available under certain criteria. I wrote about the APCD state of play here.

Caveats in the figures

According to an article in The Charlotte Observer, this data includes an “all-in” price — not just the hospital or just the doctor or just the anesthesiologist, for example, but all in for a complex procedure like an arthroscopy. So this cannot be expected to serve as an all-encompassing price estimate delivered prior to treatment on what Blue Cross will pay, but rather a record of what it has paid in the past for an episode of care like that arthroscopy.

In that regard, for a large and complex procedure, the numbers may be less valuable than for the specific small things I cite above — MRI, mammogram, pregnancy test. But still, these numbers give a range.

On the site, the Blue Cross search tool has some caveats:

“IMPORTANT INFORMATION: The information provided in this tool is FOR INFORMATIONAL PURPOSES ONLY. The estimates listed are averages and your actual costs may be different based on factors such as your health plan design, deductibles/co-insurance and out-of-pocket limits.

“Please note that many providers practice at multiple locations, and your costs can vary based on the location where you receive service. We cannot guarantee that a provider listed in this tool at the time of your search will be in network at the time you receive service. This is because we regularly add providers to our network – and occasionally providers decide to leave our network.

“For questions about how much you will actually pay for a health care service, please contact your insurer. If you are currently a BCBSNC member, please log-in to our Member Services portal and use our cost estimator tool for members, which will provide a more customized estimate based on your actual benefits.”



Jeanne Pinder

Jeanne Pinder  is the founder and CEO of ClearHealthCosts. She worked at The New York Times for almost 25 years as a reporter, editor and human resources executive, then volunteered for a buyout and founded...