We look at the current state of hospital price transparency. It is still not good.
This article builds on these two posts:
From KHN: The Current State of Hospital Price Transparency
A colonoscopy might cost you or your insurer a few hundred dollars — or several thousand, depending on which hospital or insurer you use. Long hidden, such price variations are supposed to be available under a price transparency rule that took effect at the start of this year. It requires hospitals to post a range of actual prices — everything from the rates they offer cash-paying customers to costs negotiated with insurers. Many have complied. But some hospitals bury the data deep on their Web sites. Or have not included all the categories of prices required. This according to industry analysts. A sizable minority of hospitals have not disclosed the information at all.
While of limited use right now to the average consumer, this trove is, eye-opening. As it illustrates the huge differences in prices. Nationally, regionally, and within the same hospital. It’s challenging for consumers and employers to use, giving a boost to a cottage industry that analyzes the data, which in turn could be weaponized for use in negotiations among hospitals, employers and insurers. Ultimately, the unanswered question is whether price transparency will lead to overall lower prices.
In theory, releasing prices may prompt consumers to shop around, weighing cost and quality. Perhaps they could save a few hundred dollars by getting their surgery or imaging test across town instead of at the nearby clinic or hospital. But, typically, consumers don’t comparison-shop, preferring to choose convenience or the provider their doctor recommends. A recent Peterson-KFF Health System Tracker brief found that 85% of adults said they had not researched online the price of a hospital treatment. And hospitals say the transparency push alone won’t help consumers much. Because each patient is different — and individual deductibles and insurance plans complicate matters.
Under the rule, hospitals must post what they accept from all insurers for thousands of line items, including each drug, procedure or treatment they provide. In addition, hospitals must present this in a format easily readable by computers and include a consumer-friendly separate listing of 300 “shoppable” services, bundling the full price a hospital accepts for a given treatment, such as having a baby or getting a hip replacement.
What’s Actually Happening
The negotiated rates now being posted publicly often show an individual hospital accepting a wide range of prices for the same service. Depending on the insurer, often based on how much negotiating power each has in a market. In some cases, the cash-only price is less than what insurers pay. And prices may vary widely within the same city or region.
In Virginia, the average price of a diagnostic colonoscopy runs $2,763. But the range across the state is from $208 to $10,563. According to a database aggregated by San Diego-based Turquoise Health, one of the new firms looking to market the data to businesses while offering some information free of charge to patients. Another is Health Cost Labs, which will have pricing information for 2,300 hospitals in its database when it goes live this month.
Tips for Finding Information
Patients can try to find the price information themselves by searching hospital Web sites. Yet even locating the correct tab on a hospital’s website is tricky. Here’s one tip: “You can Google the hospital name and the words ‘price transparency’ and see where that takes you,” said Caitlin Sheetz, director and head of analytics at the consulting firm ADVI Health in the Washington, D.C., area. Typing in “MedStar Health hospital transparency,” for example, likely points to MedStar Washington Hospital Center’s “price transparency disclosure” page, with a link to its full list of prices, as well as its separate list of 300 shoppable services. By clicking on the list of shoppable services, consumers can download an Excel file. Searching it for “colonoscopy” pulls up several variations of the procedure, along with prices for different insurers, such as Aetna and Cigna, but a “not available” designation for the cash-only price. The file explains that MedStar does not have a standard cash price but makes determinations case by case. Performing the same Google search for the nearby Inova health system results in less useful information. Inova’s Web site links to a long list of thousands of charges, which are not the discounts negotiated by insurers, and the list is not easily searchable. The website advises those who are not Inova patients or who would like to create their own estimate to log into the hospitals’ “My Chart” system, but a search on that for “colonoscopy” failed to produce any data.
Because of the difficulty of navigating these Websites — or locating the negotiated prices once there — some consumers may turn to sites like Turquoise. Doing a similar search on that site shows the prices of a colonoscopy at MedStar by insurer. Yet the process is still complicated. First, a consumer must select the “health system” button from the site’s menu of options, click on “surgical procedures,” then click again on “digestive” to get to it.
What Patients Should Learn
For consumers who go the distance and can find price data from their hospitals, it may prove helpful in certain situations:
- Patients who are paying cash or who have unmet deductibles may want to compare prices among hospitals to see if driving farther could save them money.
- Uninsured patients could ask the hospital for the cash price or attempt to negotiate for the lowest amount the facility accepts from insurers.
- Insured patients who get a bill for out-of-network care may find the information helpful because it could empower them to negotiate a discount off the hospitals’ gross charges for that care.
While there’s no guarantee of success, “if you are uninsured or out of network, you could point to some of those prices and say, ‘That’s what I want,’” said Barak Richman, a contract law expert and professor of law at Duke University School of Law.
But the data may not help insured patients who notice their prices are higher than those negotiated by other insurers. In those cases, legal experts said, the insured patients are unlikely to get a bill changed because they have a contract with that insurer, which has negotiated the price with their contracted hospitals. “Legally, a contract is a contract,” said Mark Hall, a health law professor at Wake Forest University.
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Note: KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.