Irrational pricing

The Washington Post has an article today describing how the price for a cholesterol panel can range from $10 to $10,000 (the average was $220.  I charge $30).  Yes, the exact same test can cost 1,000x as much at a different hospital.

The authors have no firm conclusion about why there is such a range.  One obvious conclusion is that their pricing (like the pricing in most US healthcare) is not based on the cost of providing the service or the value.  Pricing  is arbitrary and the number only means something when the hospitals misleadingly claim “charity” if it is not paid.

Distortions like this would not exist if healthcare was more like a free market.