Usually, we don’t think about choice and a medical procedure. It’s a trip from the GP to the specialist and then to the specialist’s hospital.
There’s rarely a pause for thought in between. But you should at least check to see what will be charged and whether your medical insurance will cover it, or just part of it.
Some standard operations can cost three times more in one hospital than in another.
And some states are generally more expensive than others when it comes to a hospital visit.
This chart, created in a study of health costs by the public policy think tank the Grattan Institute, illustrates how the cost of laparoscopic cholecystectomies, a type of gall bladder removal, differs depending on where it happens:
In Queensland, a hospital will remove gall bladders for around $6,700 while in Victoria its $5,000.
Within New South Wales, the hospital with the highest cost is more than twice as expensive as the hospital with the lowest cost.
Among the five hospitals that do the most operations in NSW, median costs range from less than $4,200 to almost $8,000.
And this chart looks at the simple hip replacement:
Would you rather pay as little as $10,000 in New South Wales or more than $30,000 in Tasmania for a new hip?
And here’s how the states compare after the Grattan Institute adjusted for as many variables as it could find:
Victoria wins overall.
And within each state, there’s sometimes a large range in the fees. The ACT has the least variation in fees but it’s also the most expensive according to the previous chart.
The Grattan Institute’s report, Controlling costly care: a billion-dollar hospital opportunity, looked at why the costs are so variable for the essentially the same work.
Some hospitals are much better than others at reducing avoidable costs.
The report says:
But core aspects of how the hospital system is managed stand in the way of improving performance in high-cost hospitals.
Some states, either by setting high prices, or through other kinds of funding, are simply paying too much for hospital care.
This does little to spur less efficient hospitals to improve.
Using the gall bladder surgery as an example, the report says this shows that much of the cost variation is caused by factors hospitals can control.
On average, the patients in high-cost hospitals weren’t older people and very few had other significant health problems. The situation is similar for hip replacements.
Business Insider Emails & Alerts
Site highlights each day to your inbox.