Kaiser Permanente’s negotiated prices are up to 500% lower than United Healthcare’s – Here’s What We Found.

Recently, because of new legislation, major health insurers in the United States released data sets detailing the prices they’ve negotiated with healthcare providers. Suddenly, information about pricing patterns and discrepancies between insurers and providers has become publicly available.
We dug into the data, and found that Kaiser Permanente negotiated prices are up to 500% lower than United Healthcare’s. For example, United’s negotiated price for an oritavancin injection (NDC code 70842-0140-03) is $992.78, while Kaiser’s is only $24.40. Kaiser’s negotiated price for a lumasiran injection (NDC code 71336-1002-1) is $356.20, while United’s is listed at a whopping $119,644.80. These are some staggering differences!
Company Brand Treatment Amount Less Kaiser Pays Compared with United Healthcare
Alnylam Pharmaceuticals Oxlumo Lumasiran injection 198.94%
Bayer Eylea Aflibercept injection 189.29%
Stemline Theraputics Elzonris Tagraxofusp injection 195.58%
Horizon Therapeutics Krystexxa Pegloticase injection 153.19%
Novartis Lucentis Ranibizumab injection 194.25%
Novartis Ilaris Canakinumab injection 197.09%
Novartis Signifor Pasireotide injection 186.62%
Shire Pharmaceuticals Oncaspar Pegaspargase injection -132.49%
Sun Pharma Ilumya Tildrakizumab injection 196.27%
Ipsen Somatuline Lanreotide injection 197.94%

Here’s the data in more detail:

NDC Code Treatment Kaiser Permanente United Healthcare (Min) United Healthcare (Max) Brand Company
71336-1002-01 Lumasiran injection $296.83 $111487.20 "$119 644.80" Oxlumo Alnylam Pharmaceuticals
61755-0005-02 Aflibercept injection $915.75 $33300.00 "$43 068.00" Eylea Bayer
72187-0401-01 Tagraxofusp injection $296.34 $26496.59 "$31 795.90" Elzonris Stemline Theraputics
75987-0080-10 Pegloticase injection $2968.60 $22398.79 "$31 038.32" Krystexxa Horizon Therapeutics
50242-0082-03 Ranibizumab injection $307.20 $21060.00 "$27 237.60" Lucentis Novartis
00078-0734-61 Canakinumab injection $115.89 $15822.31 "$19 932.01" Ilaris Novartis
55292-0139-01 Pasireotide injection $472.85 $13667.99 "$17 677.27" Signifor Novartis
72694-0954-01 Pegaspargase injection $21561.05 $4377.98 "$5 253.58" Oncaspar Shire Pharmaceuticals
47335-0177-95 Tildrakizumab injection $133.59 $14201.65 "$15 428.95" Ilumya Sun Pharma
69097-0870-67 Lanreotide injection $66.18 $12805.43 "$12 805.43" Somatuline Ipsen

How did we figure this out?

These data sets are huge, and pretty opaque. We’re talking terabytes and terabytes of data with confusing billing codes.
To begin, we decided to compare pricing from United Healthcare and Kaiser Permanente for a corticosteroid called dexamethasone. We pulled some data from both insurers’ sets, and ran into our first challenge: dexamethasone is prescribed for so many different services, each of which has a different billing code, and the billing codes are not the same for each insurer. We then used this data set to cross reference the billing codes and map them together, in order to make accurate comparisons.

Why is the discrepancy so high?

Kaiser Permanente operates on a unique model, wherein the insurance company is also the provider. Kaiser owns all of the hospitals and employs all of the doctors within their network. Given that this is the case, it makes sense that the prices they set for their providers would be lower – they have nothing to gain from negotiating higher prices.

United Healthcare, on the other hand, operates like a traditional insurance company. They’re a middleman between providers and patients, and they finance the care the patient receives. Given that they stand to profit from negotiating higher prices, we can see why they would be so much more expensive.

We also noted the wide range of values negotiated by United Healthcare with different providers.For example, for an Aflibercept injection (see the second row of the table), the minimum price is $33,300 USD, and the maximum is $43,068. For a healthcare provider, knowing that the range is so wide is valuable information when negotiating pricing for services.

Having access to this information can help purchasers make more informed decisions about which option to choose. Employers who are purchasing healthcare plans for their company can weigh what plans will provide the most benefit to their employees while still fitting in their budget. Healthcare providers have the information to leverage for better prices. Individuals, while they may still be hampered by the financial challenges of paying for insurance out of pocket, can get a better understanding of what they’re paying for. And because of the size of these data sets, there’s so much more to explore.

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