Dive Brief:

• UnitedHealth Group, parent company of the nation's largest commercial insurer, found significant variation in the prices paid for seven common diagnostic tests including echocardiograms, mammograms and ultrasounds. The variation, which researchers said was not because of geographic differences, ultimately leads to overspending for consumers, according to the report.
• The company analyzed spending on 12.5 million diagnostics tests for its commercial plan members in 2017 and found the price paid for an echocardiogram varied from $210 to $1,830.
• Tackling pricing variation could eliminate $18.5 billion on spending for these common diagnostic tests, the report found. That's if the high prices were brought in line with those in the 40th percentile.

Dive Insight:

UnitedHealth isn't the only insurer to call out variation in pricing for diagnostic tests.

In 2017, Anthem, the nation's second-largest private payer, went as far as to say that it would no longer pay for outpatient imaging at hospital-owned facilities, pointing to enormous price differences among the procedures.

Anthem said it would instead send patients to independent facilities for outpatient imaging tests including MRIs and CT scans.

MRIs and CT scans were among the seven most common diagnostic tests UnitedHealth Group analyzed in its price variation report.

The payer found that spending for those seven groups of tests totaled $37.4 billion in 2017.

Tackling price variation would mean lower out-of-pocket costs for patients and potentially lower premiums, the report argues.

The price variation is not related to improved patient outcomes or the quality of the provider, according to the report. "A more likely reason is that health care providers generally are incentivized to use their market power to increase prices, often resulting in overpriced services," the authors write.

The brief states "geographic cost differences have relatively little impact on actual provider price variation," but other research has shown cost changes between various parts of the country. A recent Health Care Cost Institute report that studied more than 100 metro areas found the lowest prices in Baltimore, where rates were 33% below the national average in 2016, and highest in Anchorage, Alaska, and San Jose, California, where rates were 65% above the average.