Zurik: Dramatic price disparities found when comparing insurers - FOX 8 WVUE New Orleans News, Weather, Sports, Social

Editor's Note: This story has been updated with more recent market share numbers for the healthcare providers cited.

FOX 8 has obtained a document - among the most sensitive in the healthcare industry. It contains information that could help you determine what you pay when you go to your hospital or healthcare provider.

A local provider sent us a spreadsheet that shows his businesses' negotiated rates with three insurance companies, Blue Cross Blue Shield, United Healthcare and Humana. The document shows a huge disparity in costs.

For an MRI of the spine, United Healthcare will pay that provider $1,000. Humana, a little less, $988. But Blue Cross Blue Shield is significantly less: $464.

"I think most people are going to be amazed at the difference in price," says Drexel University's Robert Field, a widely-cited expert on healthcare policy.

"If you don't work in the healthcare area," Field continues, "you assume that providing a service has a cost associated with it and that the price that's going to be charged has some relationship to that cost. And what we see with this wide variation is that the price that we pay, or the insurance company pays, really no relationship to the cost. It's purely a matter of how good a deal you can negotiate. And I think that's going to open the eyes of a lot of people who don't see this dynamic really driving our health system."

We are not identifying the provider because of their contracts with these insurance companies. Of the 10 MRI's this provider sent, Blue Cross has the lowest negotiated contract price for each one.

The price difference between insurance companies ranges from $200 to $600 for each procedure.

"Companies like Blue Cross, when you dominate the market, you're the gorilla and you can literally throw your weight around," Field tells us.

According to the La. Department of Insurance, Blue Cross controls almost 70 percent of the health insurance market in the state, United 14 percent, Humana just 9 percent.

"If I'm negotiating to buy one car, I'm going to get one set price," says David Hochheiser, senior vice-president of provider networks & healthcare value at BCBS of Louisiana. "If I'm negotiating to get a fleet of cars, I'm probably going to get a slightly better price on that because I'm getting a bigger collection of people together. It's kind of that group buying perspective."

Blue Cross Blue Shield says all rates are based on a national benchmark. "One of the things we're always looking at is how do our rates compare to Medicare rates," Hochheiser says. "And the hospitals are doing it to, the individual providers... And much of what we base our fee schedules on, the rates we pay for an individual code, are based off of what Medicare is paying for those same services."

Typically, Blue Cross says their rates range from 140 percent to 200 percent of Medicare rates.

But for this provider and these procedures, the Blue Cross rates are actually lower the allowable Medicare rate.

"The rates at the hospital that were contracted with Blue Cross Blue Shield were $400 to $500 more, per procedure, than what they could have the procedure performed for at a non-hospital facility such as Doctor's Imaging," says Shea Soll, who owns Doctor's Imaging Services in Metairie.

Soll says his contracts prevent him from sharing his negotiated rates with insurance companies, but he notes the price differences can be much different when insurance companies or even different providers are compared.

FOX 8 News and our partners at NOLA.com | The Times-Picayune and ClearHealthCosts.com have spent the past five months gathering healthcare prices around the metro area. Hundreds of our viewers have contributed pricing information too.

One viewer who's an Aetna customer had a patient responsibility of $748 on an MRI at Ochsner. That viewer could have saved $250, ignoring her Aetna insurance and using cash at a nearby imaging center.

"The insurance companies will typically give in for higher rates on the imaging services, in order to secure lower fees for more intensive-type services," Soll says, "whereas, when an insurance is negotiating with a non-hospital provider for imaging services, that's the only thing they're negotiating. So, they play hard ball and the insurance companies essentially tell you what the rate's going to be, and you can accept it or not."

There's more. Our healthcare provider source provided FOX 8 with negotiated rates of these three insurance companies and their cash prices. For that MRI of the spine, remember, United had a contract price of $1,000, Humana $988.

But if you're willing to pay cash, the same procedure costs much less: $675.

"I was quite surprised," Field says. "What that means is you can walk in off the street and, without even negotiating, you can get a bigger deal than these large, sophisticated, corporate insurance companies."

If we could all see all the prices all the time, as we do in our source's document, we might think differently about our rising insurance premiums and rising out-of-pocket costs. That would mean that we would know the price of an MRI in advance, just as we would if we compared prices at Costco and Sam's Club, or Rouse's and Winn Dixie.

"It would fundamentally change healthcare," Field tells us. "Right now, providers and insurance companies try to keep their rates secret. They don't want the other companies to know and they don't want the individual self-pay patients to know, because then you know how cheap a rate you could get. But imagine if it were like buying a TV, where every TV had a price under it and there were no secrets."

Our Cracking the Code series looked at pricing different providers. One of the many things we learned is that, when you shop health insurance, you should ask questions - because, in this case, the name of your insurance company can make a big difference in much you pay.

"If we saw that in healthcare, we would see a transformation," Field says. "We would see prices coming down and we would see care becoming a lot more accessible, particularly to people who don't have insurance."

The rates vary from provider to provider; the MRI of spine procedure here is one example of thousands in the metro area.

Humana never responded to our request for comment. United Healthcare sent this statement late Wednesday:

UnitedHealthcare fundamentally believes people should have access to accurate and actionable information about the quality and cost of health care services to help them make more informed decisions. This is important because there are significant price variations for health care services and procedures at hospitals and doctors’ offices nationwide, yet studies conclude that higher-priced care providers do not necessarily deliver higher-quality care or better health outcomes. In New Orleans, a knee MRI can cost from $527 to $3,764, and back surgery (lumbar fusion) can range from $21,590 to $79,196.

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