Half of Hospitals Charge Cash Patients Less Than Insurers Pay
We compared the posted cash price against the median commercial negotiated rate for a brain MRI at 539 U.S. hospitals. At half of them, cash is cheaper.
Hospitals have been required to post both numbers since 2021. Almost nobody reads them together. Put them on the same axis and the assumption underneath American health coverage starts to wobble: that the negotiated rate your plan secured is the good price, and cash is what you pay when you have no leverage.
For a brain MRI without contrast, that holds at roughly half of the hospitals we could measure. At the other half it is backwards.
The median hospital in the panel charges cash patients almost exactly what it has negotiated with commercial payers. Not less, not more. For a product that costs insurers billions of dollars a year to administer, parity is a strange place to land.
Figure 1
Cash price vs. negotiated rate, one dot per hospital
Both axes show the price as a multiple of what Medicare pays. Hospitals below the diagonal charge cash patients less than commercial insurers pay.
Try the interactive chart: hover or tap any dot for that hospital's figures. Click the legend to filter. On mobile, swipe the chart horizontally to explore.
What the four corners mean
The dashed diagonal is parity: cash price equals negotiated rate. Distance from that line shows which payment method is cheaper and by how much. The quadrants compare each price with the panel medians, so they describe relative price levels rather than declaring a winner.
Higher Negotiated, Lower Cash (lower right)
hospitals have negotiated rates above the panel median and cash prices below the panel median. Many sit below the parity diagonal, where the walk-in price beats the negotiated rate, but the diagonal and dot color determine that outcome for each facility.
Lower Negotiated, Higher Cash (upper left)
hospitals have negotiated rates below the panel median and cash prices above the panel median. Many sit above the parity diagonal, where coverage is doing real work, but the quadrant alone does not determine which price is lower.
Higher on Both Measures (upper right)
hospitals are above the panel medians for both cash and negotiated rates. These facilities are relatively expensive in both dimensions, even though one payment method may still be cheaper than the other.
Lower on Both Measures (lower left)
hospitals are below the panel medians for both cash and negotiated rates. This means they are lower-priced relative to this panel, not necessarily close to Medicare.
Three things worth sitting with
The spread dwarfs the discount. Cash prices in the panel run from about $ to $ for the same scan. Choosing the right hospital matters far more than choosing the right payment method. Anyone optimizing their insurance without looking at facility choice is working on the smaller variable.
Parity is not equivalence. A cash payment does not count toward a deductible or an out-of-pocket maximum. Paying $900 in cash when the negotiated rate is $1,000 leaves you worse off if you are going to hit your deductible later in the year anyway. The chart shows list prices, not the right answer for any individual.
A low cash price is often deliberate. Self-pay discount policies, charity care schedules, and prompt-pay programs all produce cash prices well below negotiated rates. That is a hospital making a choice, not a hospital making a mistake. It does mean the cash price is frequently the best publicly posted number a patient can act on.
The negotiated rate is a floor for the payer and a ceiling for nobody. Cash is posted, fixed, and knowable before you walk in.
If you work on the other side of this
Contracting and revenue cycle teams tend to find their own facility on this chart before they find anything else. Two readings are worth having.
- If you sit well above the diagonal, your negotiated rates are below your own posted self-pay price. That is a straightforward argument to bring to renewal.
- If you sit well below it, your cash policy is underwriting volume that your commercial book is paying more for. Sometimes intentional. Often nobody has looked.
Either way the useful unit is not the national picture, it is your facility against the others in your market on the codes you actually negotiate.
Method
Cash price. Discounted cash price field from hospital machine-readable files, facility setting, CPT 70551. Hospitals whose cash price equals their gross charge were excluded as unpopulated.
Negotiated rate. Median across commercial payers reporting a negotiated dollar amount for the same code and setting. Hospitals with fewer than three reporting payers were excluded.
Benchmark. Medicare OPPS national unadjusted payment, $. Both axes are expressed as a multiple of it.
Panel. hospitals drawn from reporting facilities. Where a health system publishes one rate table across multiple campuses, the facilities are counted as a single observation so that large systems do not dominate the distribution. Specialty facilities that do not perform brain MRI as a shoppable service were removed.
This is a broad national panel, not a census of every U.S. hospital. We use roughly 500 hospitals because that is the set with usable, comparable cash and negotiated-rate records after those filters. It is large enough to show variation across markets while keeping the comparison consistent from facility to facility.
Limits. Rates below 0.6× or above 20× Medicare were treated as parsing errors. Cash prices do not accrue to a deductible, so parity with a negotiated rate is not economic equivalence for an insured patient.
Classification. Cash-versus-negotiated comparisons use the posted dollar values shown in each tooltip. “More than 20% cheaper” means cash divided by the negotiated median is strictly less than 0.80. Quadrants use the panel medians; values equal to a median are assigned to the right or upper quadrant.
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