The United States spends almost
five trillion dollars a year on healthcare, and still manages to deliver worse outcomes than most wealthy nations. This paradox has been explained in many ways—an aging population, complex insurance arrangements, overuse of technology. But one answer, long suspected and now undeniable, is far simpler: Americans aren’t paying more because they get more care. They’re paying more because the same care costs wildly different amounts depending on where you live, which hospital you choose, and which insurer happens to cover you.
The result is a jarring portrait of inconsistency that borders on absurd. A coronary bypass without complications, for example, has a national median negotiated price of roughly $68,000. Yet depending on the hospital, the same operation might cost as little as $27,000 in rural Louisiana or as much as $248,000 in New Jersey. In Pennsylvania alone, the price of bowel surgery billed to the same insurer ranged from $18,000 to $87,000 across hospitals. And even at a single facility, insurers pay very different sums: one Boston hospital charged Aetna $96,000 for a bypass but billed UnitedHealthcare $144,000 for the same procedure.
