Huge Disparities in Health Care and Car Repair Costs
No matter if we’re talking about care for cars or human beings, there is not much consensus as to how much businesses should charge for complicated operations, let alone routine maintenance.
Two new studies show that how much its costs of health care and car repairs vary widely depending on where you live and, frankly, what the fix-it specialists feel like they can get away charging.
A report from CarMD.com holds that five dry states in the Southwest—Arizona, New Mexico, Colorado, California, and Nevada—have the dubious distinction of charging the most for repairs needed once a car’s “Check Engine” light starts glowing. Arizona is the priciest of all, with the average repair costing $421.49. The national average, by contrast, is $356.04. Oddly enough, Washington, D.C., where the cost of living is fairly high, and where overcharging people seems ingrained in the city’s DNA, boasts the nation’s least expensive average repairs, at $265.29.
Actually, there are some reasonable justifications for the repair job price disparity. The prices rounded up by CarMD are not apple-to-apple comparisons. They are comparing the average repair job needed in one state or district to the average repair job in another—and because of different climates, driving conditions, and typical car usage, what’s “average” in one region may be exceptional in another.
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The states out West with the highest average costs have warm, sunny climates, and they don’t have much in the way of public transportation. Both of these factors lead drivers to be on the road more often, and more driving means more wear and tear on cars. Also, as a quote in the Los Angeles Times points out:
“Labor costs in the West tend to be higher because the repairs relating to problems from dry air and residue from airborne dust tend to be more expensive and take longer to repair,” said Art Jacobsen, vice president of CarMD.com.Speaking of labor costs, the CarMD shows that six of the ten states with the lowest average repair costs are in the Midwest (Nebraska, Wisconsin, Ohio, Missouri, Indiana and Minnesota), where hourly employees tend to make less money compared to areas along the coasts.
But what about D.C., where the cost of living and salaries tend to be higher than average? Two factors help give the city the appearance of charging less for repairs: 1) Most repairs needed by D.C. drivers are simple, inexpensive jobs with little parts and labor required (12% were related to gas caps); and 2) the city had a high portion (12%) of repairs at no out-of-pocket expense to the driver, most probably because the car was still under warranty.
So does the average garage in D.C. charge less for the same repair job than the average garage in Arizona? Not necessarily.
The huge disparities in health care procedure costs are much harder to justify. Data from national health care group change:healthcare shows an enormous range in what’s charged for MRIs, ultrasounds, CT scans, and other procedures, though most patients pay little attention because they’re only on the hook for their insurance policy’s co-pay or deductible. Two summers ago, a New Yorker story written by Dr. Atul Gawande made news because it revealed how nonsensical hospitals could be when pricing health care procedures, with one institution charging far more than another located a few miles away. The new data back these findings, demonstrating that, for example, the cost of an MRI in the same part of the Southeast could be $560 or $$2,500.
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Per USA Today:
“There’s been a barrage of studies that show differences from region to region,” said Christopher Parks, founder of Change:healthcare. “That makes sense — California’s more expensive than Alabama. But this is within a 20-mile radius in your own town.”Just one more reason it’s sometimes a really good idea to get a second opinion—from doctors and mechanics alike.
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