Why COVID tests can cost anywhere between $20 to $1,400
ARI SHAPIRO, HOST:
What should a test for COVID-19 cost - $20, more than $1,400? Those are both real prices from last year, according to one study. While government and insurance companies have often covered these costs, somebody ultimately has to pay. Adam Tanner wrote about the huge price range in these tests for Consumer Reports.
Welcome to ALL THINGS CONSIDERED.
ADAM TANNER: Nice to be with you.
SHAPIRO: Can you start by giving us a baseline number of what a PCR test for COVID-19 should cost?
TANNER: Well, it's hard to answer directly this question. And that is because you have to have the raw materials, and then you need a machine that can be from thousands of dollars to hundreds of thousands of dollars depending how many tests it does. At the time, you've got to pay the staff, the utilities and so on. But the raw cost of the test itself - the raw materials are rather low. They can be as low as $29. So the actual cost is not that high. But companies will disagree as to what the true cost should be.
SHAPIRO: Does that explain the wide range in prices, or is there more going on here?
TANNER: The wide range of prices is pretty much explained by the fact that it is an open free market with medicine as it is in almost everything else in the United States. So the same way as car prices will go up and down according to supply and demand, it happens with medicine. It happens with testing. So under the U.S. government rules, insurers have to pay for medically necessary tests no matter what the price when it comes to COVID. So that means if they charge an average $100 or $150, that's OK. If the test lab thinks they need several tests in unison, perhaps raking up a bill of as high as a thousand dollars, that is also allowed under the U.S. rules. And insurers are supposed to pay.
SHAPIRO: So why are we seeing people pay hundreds of dollars out of pocket?
TANNER: So the rules are if they are medically necessary tests - that means either you have COVID or you've been exposed to someone that has COVID - those tests are covered by the U.S. rules covered by your insurance company. If, however, they're not medically necessary - you want to go traveling to a place that requires a test; you want to go to a concert; you want you go to - back to work and your work requires it - then you have to pay. Those are considered non-medically necessary tests. And, again, there's a very wide range of prices from zero at community centers, at health centers, various hospitals to hundreds and hundreds of dollars, whatever these new testing centers may want to charge. So it pays to check what those prices are.
SHAPIRO: How profitable is this for testing companies?
TANNER: Well, the big medical testing labs and companies are making literally billions of dollars, so it is a very big business. Now, of course, this is an essential service. We should be really thankful for the people who, on the ground, are doing this testing on the frontlines. But there is big money when combined, and the biggest makers of this big money are the big companies that do the testing, that do the medicine.
SHAPIRO: You also write that the current U.S. rules allow for-profit pop-up sites offering simple rapid tests to operate without any experience in healthcare or science. What are the implications of that?
TANNER: Well, so when we think of testing labs, you might imagine someone in a lab coat working with test tubes and studying scientific instruments. But there, of course, are these easy tests that we know as at-home tests. They're simple enough that anybody can do them at home, buy them over the counter or the internet. So if you set up a testing counter on the street in a van, these are simple enough where it is hard to make a mistake. These are labs or operations that are allowed to operate waiving the usual federal government rules. That means pretty much anyone can do it.
So it could be a very reputable operation. It could be someone with no experience in medicine or health care. And there are many people who've entered the market. So, again, it's this balance. The more people offering testing - this is an important, valuable service for the nation at this time. But at the same time, if they're charging high prices, that may be hurting us to a certain extent. And this is part of that dilemma of testing.
SHAPIRO: Adam Tanner is a contributing editor to Consumer Reports and an associate at the Harvard Institute for Qualitative Social Science.
Thank you very much.
TANNER: Thank you.
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