Variation in charges for 10 common blood tests in California hospitals: a cross-sectional analysis

Objectives: To determine the variation in charges for 10 common blood tests across California hospitals in 2011, and to analyse the hospital and market-level factors that may explain any observed variation. Design, setting and participants: We conducted a cross-sectional analysis of the degree of charge variation between hospitals for 10 common blood tests using charge data reported by all non-federal California hospitals to the California Office of Statewide Health Planning and Development in 2011. Outcome measures: Charges for 10 common blood tests at California hospitals during 2011. Results: We found that charges for blood tests varied significantly between California hospitals. For example, charges for a lipid panel ranged from US$10 to US $10 169, a thousand-fold difference. Although government hospitals and teaching hospitals were found to charge significantly less than their counterparts for many blood tests, few other hospital characteristics and no market-level predictors significantly predicted charges for blood tests. Our models explained, at most, 21% of the variation between hospitals in charges for the blood test in question. Conclusions: These findings demonstrate the seemingly arbitrary nature of the charge setting process, making it difficult for patients to act as true consumers in this era of 'consumer-directed healthcare.'