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Just How Accurate Are Those COVID Tests?

Updated: Apr 12, 2022

We have featured a couple of health bill horror stories in the past (“No Rhyme, No Reason” and “No Rhyme, No Reason, Redux”).  There is no shortage of these, and unfortunately, sometimes the most demanding thing about reporting on these seems to be picking the most outrageous!  Yet hopefully, in addition to being shocking, they are also educating the reader. 

Good Intentions Gone Awry

Regrettably, our timely story for this post about stunningly expensive COVID tests is also not unique – there have been many accounts of astoundingly high prices. As a precautionary measure, Congress required insurers to cover Covid-19 testing. But because U.S. health care prices are unregulated and very inexplicable, that is when a few providers decided to take advantage of the situation.

With the average test for a simple coronavirus test costing around $100, consumers would use that price as a baseline in a “normal” and functioning sector of the economy. All things being equal, if the cost were less than that, the free market would reward efficiency, accuracy, and providers offering a lower, or at least equivalent, bill. However, in the United States’ unregulated system, with its opaque pricing and misaligned incentives, not only are medications and procedures double or triple what they would be in a relatively comparable country(1), there can be wild fluctuations amongst providers even within the very same city. For example, researchers surveyed “19,368 adult patients hospitalized with appendicitis. The median hospital charge among all patients was $33,611, with the lowest observed charge of $1,529 and highest of $182,955.”(2) The variance amongst the COVID tests’ prices is almost as dramatic.

Everything Is Bigger in Texas

The first egregious billing example comes from a small clinic in suburban Dallas, and is responsible for tests costing, “$2,315 for individual coronavirus tests.” The lab admitted that had it mistakenly charged patients three times the base rate in a couple of cases when the price rose as high as $6,946.(3) As the account in the New York Times’ article states, their technology is not any different from other larger diagnostic testing labs. They reference the range of pricing in Texas to be as low as $27 in some cases, with the Gibson lab being one of the most expensive.

As the article both asks and answers: “How can a simple coronavirus test cost $100 in one lab and 2,200 percent more in another? It comes back to a fundamental fact about the American health care system: The government does not regulate health care prices.” Therefore, the free market system of succeeding by offering the best product at a comparable or lower price does not apply to healthcare in the United States.

The second account is also from Dallas and even more jaw-dropping when remembering that the average cost for a COVID test is around $100. This story was recounted in the Kaiser Health News (KHN) and National Public Radio (NPR) crowdsourced series, “Bill of the Month.” The person tested, Travis Warner, is a small business owner whose company installed internet and video systems. Business was suddenly booming with the pandemic and the shift to work-from-home. Of course, Travis and his employees could not do that, regularly going into homes and concerned about exposure. An employee eventually did test positive, so prudently Travis and his wife drove 30 minutes from their home in Dallas to a free-standing emergency room in Lewisville, Texas, due to limited availability in Dallas at the time. The results were negative, but the bill when it arrived was $56,384, including $54,000 for the two tests, (PCR and antigen) and an ER facility fee. AS KHN/NPR reported, “Warner’s PCR bill of $54,000 is nearly eight times the most notable charge previously reported, at $7,000 — and his insurer paid more than double that highest reported charge. Health policy experts KHN interviewed called Warner’s bill “astronomical” and “one of the most egregious” they’d seen.”(4)

What Can Be Learned?

We stated previously to “remember the “captive audience” idea: whether you are on a plane, hotel room, a movie theater, a theme park, and especially a hospital, the price of things will be multiple times more than in other settings. A hospital patient, as in the other examples, has fewer choices than outside of these venues. The key here is to not reflexively utilize a service or product without considering that a charge, and sometimes a considerable one, will be incurred. Obviously, this might not always be possible in a hospital setting but try to remember that fact whenever possible. Remember that there are also less expensive places that this care could be available, such as a doctor’s office, imaging site or outpatient center.” In the Warners’ case, they went to an out-of-network emergency room. The article also offers that “Covid testing should be free to consumers during the public health emergency (currently extended through mid-October, and likely to be renewed for an additional 90 days).”(4)

Finally, read your bill carefully to ensure the prices seem appropriate, even if the insurance company eventually covers the entire cost since the charges can often result in higher premiums to you.



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