Where does your state rank in terms of hospital costs per procedure?

Data from Definitive Healthcare’s Hospitals and IDNs platform. Average cost per procedure is the quotient of all reported patient charges and total patient procedures, and does not account for case mix, procedure types, or other variables. Without that, the information can lead one to assumptions of facts not proven.

For example, 

The data listed below doesn’t capture the fact that the same procedure, often by the same surgeon, in a competing, accredited ASC can be $15,000 to $40,000 less if patients know how to shop and where to find lower prices. 

A “cost per procedure” is data that is essentially useless to a consumer because there’s no way to decipher what that means in terms of out-of-pocket cost shares, what kind of procedure the number represents, and more.  Our industry go-to expert, Dr Maria Todd, tells us that in the chart below, the number in the “cost per procedure” column is meant to represent a measurement across a diverse group of samples, in this case from a blood test to a complex surgery. 

As a former hospital and ASC executive she might use this to make some high-level strategic decisions if she were near a state border and seeking to entice market share to cross the border to purchase healthcare. She might also use the data to perform some internal benchmarking. But that’s only if she already has other data to frame the context of how she might use a chart like the one below. She says that “individual consumers won’t find this information very helpful. Group health purchasers could find the data a little more useful because they are paying claims on a state by state basis and have the whole data set to look at a cost per procedure. But the data won’t be actionable for them as it is.” For the data to be actionable, she says the price must be evaluated in the context of the cost of a particular procedure and the cost to access the better price where it is located.

The primary purpose of averages is to measure changes over time in the same sample group. “This is as useful as the politicians mandating elemental price transparency for each little charge instead of telling us “how much is it if I come there to have surgery?” That’s what people want to know.” She adds, “They don’t care what each piece of gauze and each stitch costs.” They want to be able to determine if they can afford the procedure and how much their insurance will cover if they have any.

It the case of a cost per procedure column as the one below, by using averages that aren’t “meaningful” to the average consumer for their purpose of price comparison,  the three most common errors occur.

First, it is common in any data set for there to be outliers. These are often best seen in a graph where most data points cluster around an area or line, then one or a few data points are off in never-never land. These outliers skew the average of the data set to “pull” it in their direction. It gives the misimpression that the data points cluster around a point that is higher or lower than where they truly cluster.

Second, many people tend to think of “average” as “typical;” the problem with that assumption in many data sets — certainly those involving health services delivery — is there are many, many, exceptions to “typical.” One could even argue there is no such thing as “typical.”

For example, one commonly misused statistic is the average price of a surgery on a body part in the United States. If one researches the question, they will discover average that there are approximately 59,000 surgical procedures on a list that is grouped by body area.  As such, each procedure is categorized differently resulting in many different average procedures per body part at many different levels of complexity. Price comparisons  must be apples to apples, procedure by procedure, at a level of detail much deeper than a category of knee surgery or spine surgery. That’s why SurgeryShopper.com lists them by their specific code in our databases.

The third way in which averages of often wrongly used is in applying them to individual scenarios. When readers of a report apply the average of a group of data points to a single point and assume it to be true, they set themselves up for errors of interpretation.

You shouldn’t have to pay more for your surgery because of which state you live in. Use our no-cost website to discover fixed price surgery in the USA from high-quality providers no matter where you live.  Our concierge team will fill in the blanks about how much it will cost to travel to the lower priced destination, and also give you other comparison shopping details in case you want to remain closer to home for your surgery.