The Most Expensive Phrase in Health Care: “Go Down the Hall”
You get an MRI ordered. The doctor’s office is inside a hospital system. Someone at the front desk says five words that will cost you thousands: “You can just go down the hall.”
So, you walk down the hall. Get the MRI. The bill: $2,500. The same MRI at a freestanding imaging center ten minutes away? $450.
Nobody lied. Nobody committed fraud. The system worked exactly the way it was designed to…and that’s the problem.
The Facility Fee Trick
Over the past decade, hospitals have been buying up independent physician practices at a staggering rate, more than 44,000 acquired since 2019. Once a hospital owns the practice, it reclassifies it as a hospital outpatient department. Same doctor. Same office. Same parking lot. But now every visit includes a “facility fee” that didn’t exist before.
The result: hospital outpatient imaging costs 165% more than at freestanding centers. Hospital lab work runs 3.5 times higher than independent labs. An EKG at a hospital outpatient office: $453. The same EKG at an independent practice: $189.
Only 42.2% of physicians remain in private practice today, down from 60.1% in 2012. That shrinking number means fewer independent options for your employees, and more bills with facility fees baked in.
The “Discount” That Isn’t
Your insurance company will tell you they negotiate aggressive discounts with hospital systems. They do. The problem is what they’re discounting from.
According to RAND Corporation’s 2024 study, commercial insurers pay hospitals an average of 254% of what Medicare pays for the same services. For outpatient services specifically — the ones your employees use most, that number jumps to 279% of Medicare rates.
So yes, your insurer got a discount. It’s still nearly three times what the government pays. The average emergency room visit costs $2,715. The same issue handled at an urgent care clinic: $165.
The gap varies by city, but it’s massive everywhere:
Houston: ER visits average $2,500 to $3,200. Urgent care: $150 to $250.
Phoenix: ER visits average $2,300 to $3,000. Urgent care: $150 to $250.
Chicago: ER visits average $2,600 to $3,400. Urgent care: $150 to $275.
Atlanta: ER visits average $2,400 to $3,100. Urgent care: $140 to $240.
Denver: ER visits average $2,700 to $3,500. Urgent care: $160 to $275.
Every one of those ER bills lands on someone’s plan. Eventually, that’s your renewal.
Cash Pay Beats Insurance
In many cases, paying cash at an independent facility costs less than using your insurance at a hospital.
A hospital charges $401 for a basic CBC blood test. Quest Diagnostics or LabCorp charges $32 for the same test. That’s a 12x markup. An MRI at a hospital: $1,200 to $3,000. At an independent imaging center: $400 to $800. Surgery Center of Oklahoma publishes all-inclusive cash prices and routinely saves patients 50 to 90% compared to hospital rates.
This isn’t a fringe strategy. Researchers estimate that 12 to 43% of all healthcare spending is on “shoppable” services; procedures where patients can compare prices and choose a provider. The savings are sitting right there. Most people just don’t know to look.
The HDHP Question
High-deductible health plans now make up 29 to 33% of employer-sponsored plans nationally. RAND Corporation data shows HDHP members spend 14% less on healthcare than those in traditional plans.
Pair an HDHP with a Health Savings Account and the math gets interesting. HSAs offer a triple tax advantage — contributions are pre-tax, growth is tax-free, and withdrawals for qualified medical expenses are tax-free. For 2026, contribution limits are $4,400 for individuals and $8,750 for families.
But an HDHP only delivers value if your employees actually shop for care. Which brings us back to “go down the hall” …the opposite of shopping.
Tools That Actually Help
Price transparency is supposed to be the law. CMS requires hospitals to publish their negotiated rates. Only 36% are fully compliant. But several independent tools make shopping easier:
Healthcare Bluebook rates procedures as green, yellow, or red based on fair pricing. MDSave lets patients purchase procedures upfront at negotiated rates. FAIR Health Consumer provides cost estimates by ZIP code. New Choice Health compares imaging, surgery, and lab costs across facilities.
None of this is complicated. It just requires knowing these tools exist — and using them before walking down the hall.
What ASA Members Can Do Today
Educate yourself and your employees. The single most valuable question in American healthcare is: “Is there an independent facility that does this?” Before accepting a referral down the hall, before scheduling at the hospital-affiliated lab, before defaulting to the ER — ask.
Use price shopping tools. Build them into your onboarding and communication. Make them part of how your company talks about benefits. Consider HDHP and HSA combinations that reward employees for being smart consumers. And remember: somewhere between 12 and 43 cents of every healthcare dollar you spend is on a service where the price can vary by 200 to 500% depending on where you walk in.
Health insurance is the only insurance anywhere where people usually want it to “use” it. Do you use your car insurance for an oil change? Given the increasing cost sharing responsibility of raised deductibles and co-pays, these are some ways to be more “value” conscious when you start to “use” your health insurance.
Chris Cordon is a Benefits Consultant at Affinity Benefits, the program administrator for the ASAdvantage Health Plan.
