Better Solutions for Healthcare

Peterson- KFF Health System Tracker: How costly are common health services in the United States?

By Daniel McDermott, Julie Hudman, Dustin Cotliar, Gary Claxton, Cynthia Cox and Matthew Rae

November 4, 2020

 It is well documented that the U.S. is an outlier among peer countries when it comes to health spending, and recent Peterson-KFF analysis finds that the cost of inpatient and outpatient care is the primary driver behind this gap in health expenditures. In addition, countless news articles have highlighted extremely high medical bills sent to patients, often resulting from balance billing from out-of-network providers. However, the actual costs of specific healthcare services in the U.S. are often hard to track down and can vary widely between plans and across the country.

In this analysis, we explore the average cost of several common healthcare services in the U.S. We analyzed data from a sample of the IBM MarketScan Commercial Claims and Encounters Database, which includes health claims from non-elderly people enrolled in large employer plans. When possible, we show how these costs have changed over time and how they vary geographically.

The charts in this analysis show average allowed amounts large employer health plans agree to pay for in-network and out-of-network care. We refer to “cost” as the weighted average total expenditures made towards a given admission or service, including the portion paid by the health plan and any out-of-pocket costs paid by enrollees under the plan’s cost sharing. However, the charts do not include any balance bills (“surprise bills”) that out-of-network providers may send directly to patients.

This collection demonstrates that the costs associated with many common health services have risen more rapidly than general economic inflation, and that there are large geographic variations in the cost of the same health services across the United States. For example:

  • The average cost of a hospital admission among large employer plans increased by roughly $10,000 (68%) from 2008 to 2018
  • Over the same period, the average cost for a laparoscopic appendectomy increased nearly five times faster than inflation
  • The average cost for a lower back MRI is nearly three times higher in the Houston, TX area ($1,106) than in the Las Vegas, NV area ($404)