WASHINGTON – In the Byzantine world of healthcare pricing, most people would not expect the ubiquitous flu shot to be a prime example of how the system's lack of transparency can lead to different costs.
The Affordable Care Act requires health insurance companies to cover all federally recommended vaccines at no cost to patients, including influenza immunizations. Although people with insurance pay nothing when they get their pictures, many do not realize that their insurance companies are on the bill ̵
In just a small sample from an insurance company, Kaiser Health News found dramatic differences between the costs of its own employees. At a facility in Sacramento, California, the insurer paid $ 85, but just a little more than half of that at a Long Beach clinic. A pharmacy in Washington, DC, was paid $ 32.
The big difference in what insurers pay for the same flu shot illustrates what's wrong with the US health care system, says Glenn Melnick, a health economist at the University of Southern California.  "There will always be some variation in prices, but $ 85 as a negotiated price sounds ridiculous," he said.
Flu shots are relatively inexpensive compared to most health care services, but given the tens of millions of Americans who get vaccinated each year, those prices are rising.
Health plans transfer these expenditures to consumers through higher premiums, economists say.
"The patient is immune to the cost, but they are the losers because they eventually pay a higher contribution," said Ge Bai, an accounting and health policy professor at Johns Hopkins University campus in Washington, DC
Bai said the variation in payments for influenza shots has nothing to do with the cost of the drug, but is a result of negotiations between health plans and suppliers.
Typically, health insurance policy reimbursements to private healthcare providers are closely guarded secrets. The insurance companies claim that confidentiality is needed for competitive business reasons.
But there is a place that the dollar figure seems to be for someone to see: the "Declaration of Benefits" forms that the insurers send to members after paying a claim.
KHN reviewed forms that one of its insurance companies, Cigna, paid for some colleagues to get flu shots this fall in Washington, DC and California.
Cigna paid $ 32 to CVS for a flu shot in central Washington and $ 40 to CVS less than 10 miles away in Rockville, Md.
In Southern California, Cigna paid $ 47.53 for a flu shot from a primary care physician with MemorialCare in Long Beach. But it paid $ 85 for a shot given at a Sacramento medical office affiliated with Sutter Health, one of the state's largest hospital chains.
Health experts were not surprised that the insurers paid Sutter more, even though they were stunned how much more. .
For several years, Sutter has faced criticism that uses its market dominance to charge higher prices. In October, there was a lawsuit brought by the state attorney, employers and unions who accused the hospital giant of illegally raising prices.
$ 85 was not only much more than what Cigna paid elsewhere, but also more than triple the price Sutter advertises on its website for people without insurance: $ 25.
How does Sutter justify its higher prices as well as different prices for the same shot in the same place?
Sutter officials had no simple explanation. "Pricing can vary based on a number of factors, including the setting of care, a patient's insurance coverage and agreements with insurance providers," Sutter said in a statement.
Cigna also said that many issues are taken into account when determining its various payments.
19659003] “What a plan replaces a pharmacy / clinic / medical center for a flu vaccine depends on the plan's contracted interest rate with that unit, which can be affected by a number of factors including location, number of available pharmacies / facilities in that area (aka competition ), and even the size of the plan (aka potential customers), "Cigna said in a statement. "It is important to remember that hospitals and pharmacies have different economies, including the costs of administering."
It is also noteworthy that Medicaid, the state's federal health insurance program that covers more than 72 million low-income Americans, pays providers much less for a flu shot. In Washington, D.C., Medicaid pays $ 15. In Connecticut, $ 19.
Nationally self-insured employers and insurance companies paid between $ 28 and $ 80 for the same type of flu shot administered at a doctor's office in 2017, according to an analysis of more than 19 million claims by people under the age of 65 by the Kaiser Family Foundation in collaboration with Peterson Center on Healthcare. (Kaiser Health News is an editorial independent program for the foundation.)
"In the end, your health plan can pay more than twice the cost of the same flu shot depending on where you get it," said Cynthia Cox, vice president of the foundation.
"We see the same pattern for more expensive services like MRI or knee replacement," she said. "That variation in prices is part of what's higher for car insurance premiums in some parts of the country."
The large difference in costs for the same service highlights a major problem in US healthcare.
"We don't" Don't have a functioning healthcare market because of all this lack of transparency and price discrimination opportunities, "Melnick said.
" Prices are inconsistent and confusing for consumers, "he said." The system doesn't work for to provide effective care, and the flu shot is an example of how these problems persist. "
An unintended consequence of the Health Law that makes flu shots free of insured patients is that the health plans have little ability to direct patients to providers who offer the vaccine for less cost because patients have no reason to care, Bai said.
Around the country, retailers such as Target and CVS offer various incentives such as gift cards and coupons to entice consumers to come in for their free flu shots in the hope that they also shop Other hospital systems, such as Southern Florida Baptist Health, have also begun maintain free flu shots for people without insurance.
Bai said that while hospitals like Baptist should be commended for helping to improve the health of their communities, there are other factors at play.
"There is a hidden motivation to use free flu shots as a marketing tool to improve the reputation of the hospital," she said. "If people come to the hospital for a flu shot, they can like the facility and come again."
Kaiser Health News is a national health policy news service. It is an editorial independent program of the Henry J. Kaiser Family Foundation that is not affiliated with Kaiser Permanente.
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