With pricing uncoupled from the actual cost of business, large disparities have evolved. The five hospitals within a 15-mile radius of Mr. Charlap’s home here charge an average of about $5,200 for an echocardiogram, according to an analysis of Medicare’s database. The seven teaching hospitals in Boston, affiliated with Harvard, Tufts and Boston University, charge an average of about $1,300 for the same test. There are even wide variations within cities: In Philadelphia, prices range from $700 to $12,000.You don't need to know anything more than that to know that the markets are not truly competitive, that consumers are uninformed about the prices (except after the fact when it's too late to shop around) and that the supply side has price-setting power.
In other words, competition doesn't lower prices*. Rather the reverse, in fact: