Price transparency data shows that cost of care varies wildly, with no link to quality

The United States spends almost five trillion dollars a year on healthcare, and still manages to deliver worse outcomes than most wealthy nations. This paradox has been explained in many ways—an aging population, complex insurance arrangements, overuse of technology. But one answer, long suspected and now undeniable, is far simpler: Americans aren’t paying more because they get more care. They’re paying more because the same care costs wildly different amounts depending on where you live, which hospital you choose, and which insurer happens to cover you. 

That truth comes into sharper focus in a new report from Trilliant Health, which analyzed the sprawling, terabyte-scale datasets insurers now publish under federal transparency rules. For decades, negotiated prices between hospitals and insurers were hidden from public view, guarded by contract clauses and antitrust concerns. Only with the Centers for Medicare & Medicaid Services’ Transparency in Coverage rule (TiC), finalized in 2020 and fully implemented in 2022, did the information spill into public space. 

The result is a jarring portrait of inconsistency that borders on absurd. A coronary bypass without complications, for example, has a national median negotiated price of roughly $68,000. Yet depending on the hospital, the same operation might cost as little as $27,000 in rural Louisiana or as much as $248,000 in New Jersey. In Pennsylvania alone, the price of bowel surgery billed to the same insurer ranged from $18,000 to $87,000 across hospitals. And even at a single facility, insurers pay very different sums: one Boston hospital charged Aetna $96,000 for a bypass but billed UnitedHealthcare $144,000 for the same procedure. 

Outpatient care tells a similar story. A colonoscopy can cost a little over $900 in Alabama, or more than $32,000 in California. Ambulatory surgery centers, often less glamorous than their hospital counterparts, typically perform the procedure for about $1,200, while hospitals average more than three times that price. Multiply the difference by the nearly two million colonoscopies performed each year, and the savings potential alone stretches into billions. 

The long battle over information

These numbers exist only because of a years-long policy struggle. For decades, employers, researchers, and even patients demanded more visibility into the actual cost of care. Yet insurers and hospitals resisted, citing proprietary contracts and the specter of “price fixing.” Antitrust law, meant to protect consumers, ironically ensured opacity. 

The stalemate ended when Executive Order 13877 was issued in 2019, directing regulators to force insurers to publish real negotiated rates. After legal challenges, the requirement survived and went into effect under the Biden administration in 2022. For the first time, negotiated prices—once buried in filing cabinets and electronic silos—became publicly available. 

The files themselves, however, are nearly useless to anyone without sophisticated data infrastructure. Trilliant processed more than 20 terabytes of Aetna and UnitedHealthcare filings to create its report. For ordinary patients, that kind of transparency is opaque by another name. But for employers, who finance more than half of all American health coverage, the information carries legal and moral weight. Under the Employee Retirement Income Security Act of 1974 (ERISA), companies have a fiduciary duty to manage benefits in the best interest of their employees. And under Delaware corporate law—where most U.S. companies are incorporated—executives must make “informed business decisions” based on material information. Now that the data is available, choosing not to use it may itself be a breach of responsibility. 

Price and value, decoupled

One of the most striking findings in the Trilliant analysis is what prices do not reflect: quality. Looking at hospitals often celebrated on national “best of” lists, researchers found no consistent correlation between negotiated rates and patient outcomes. In some cases, hospitals with higher readmission rates or lower patient-safety scores were paid significantly more than those with better track records. 

This disconnect has appeared before in the academic literature. A 2019 RAND study found that employers in Indiana paid hospitals nearly three times Medicare rates without any measurable bump in performance. Similarly, analyses published in Health Affairs and JAMA have shown that higher commercial prices rarely translate to better quality care. What Trilliant adds is precision: facility-level, payer-specific evidence that undermines the idea that the most expensive hospitals must also be the best. 

What transparency can and cannot do

The great hope of transparency rules was that sunlight would serve as disinfectant—that, once armed with the truth, employers and consumers would push the market toward rationality. There is some precedent: in pharmaceuticals, for instance, the publication of average sales prices helped Medicare negotiate lower costs for certain drugs. But health care is not a typical marketplace. Patients rarely shop around for surgery while in pain. Employers face limited provider options in markets dominated by a handful of health systems. 

Transparency, then, may not by itself transform pricing. It may, however, sharpen debates already underway. Congress has toyed with policies to limit hospital consolidation, curb surprise billing, and give employers more leverage in contract negotiations. Regulators may now have the data to act more aggressively. And some benefit consultants are already building tools to help companies steer workers toward lower-cost, equal-quality providers. 

A mirror, not a cure

In the end, Trilliant’s report is less a solution than a mirror. It reflects what economists Gerard Anderson and Uwe Reinhardt argued two decades ago when they titled a landmark paper “It’s the Prices, Stupid”: that America’s healthcare system is expensive because its prices are untethered to either cost or value. The new transparency regime proves the point, but it doesn’t fix it. 

Transparency exposes. It embarrasses. It may even compel change at the margins. But without structural reform—antitrust enforcement, stronger purchasing power for employers, or a cultural shift in how Americans think about medical care—the spectacle of price variation may remain just that: a spectacle.