Cost Variation

One way to help manage our health care budget is to learn about cost variation. Did you know that the price of a medical service or procedure varies by provider and/or location? This is called cost variation. There is no correlation between price and the quality of the services received, yet prices can vary by as much as 70% across the state. A medical provider will provide the same exact services, but determines a pricing structure based upon what insurance companies agree to pay. We can affect health care spending by choosing to receive care at facilities that charge less money.

The USNH HealthCost website provides information about the prices of specific medical services in New Hampshire to make health cost information easier to find and understand. It can help us bargain shop for health care, like we would for plane tickets or a new car, by showing us the cost of various medical procedures at 27 New Hampshire hospitals, which is typically difficult to determine. The NH Hospital Score Card provides information about how New Hampshire hospitals to compare to each other overall in terms of cost and quality.

Below is an example of cost variation:

A person working at UNH and residing in the seacoast area is most likely to receive care at Exeter Hospital, Frisbie Memorial Hospital, Portsmouth Regional Hospital, or Wentworth Douglass Hospital. Using a knee MRI for this example in cost variation, the USNH HealthCost data shows the following information:

The above graphic is a screenshot from the USNH HealthCost website. It shows us that a UNH employee with the USNH HMO insurance plan could get a knee MRI in the seacoast area for as little as $1,353 and as much as $2,545. This is a cost variation of 47%.

It is important to remember that this example of cost variation applies only to the procedure of a knee MRI. It's possible that a hospital with an expensive knee MRI might charge a much more affordable rate for a different procedure, such as an emergency room visit or a hernia repair.