The Transylvania Times -

Hospital Prices Can Be Clearer

 

January 24, 2019



On Jan. 1, 2019, a new law went into effect that requires all hospitals in the United States “to make public a list of their standard charges via the Internet in a machine readable format, and to update this information at least annually, or more often as appropriate.”

The reason for the law is that patients have been charged significantly different prices for the same tests or procedures in the same region. According to Centers for Medicare and Medicaid Services (CMS) administrator Seema Verma, it is not unusual for patients to see a 50-70 percent price discrepancy between two health care providers in the same region. According to Blue Cross Blue Shield of North Carolina (BCBSNC), the lack of transparency regarding hospital prices “costs U.S. more than $100 billion each year.”

The hope is that patients in non-emergency situations can compare prices before selecting a hospital, resulting in significantly lower costs for patients.

However, the way the law was written and been implemented has not done much to provide transparency. The federal law provides no penalties for those who do not comply with the law, and the CMS has no system in place to monitor hospitals to see if they are complying with the law. A law with no penalties and no way to determine if it is being followed is not much of a law.

Although the law requires the prices be presented in a “machine readable format,” that does not mean the format is “reader friendly.” Hospitals can use Excel spreadsheets and XML code, which many people have difficulty reading, but easy to read PDFs they are not in compliance with the law.

Many hospitals have buried their prices in online submenus that are difficult to find. According to online news site Quartz, the Methodist Hospital in San Antonio put its standard rates on the legal page while Indiana University Health put its prices under the Frequently Asked Questions section of its website.

There is no good reason this information should be hard to find. Businesses design websites to make it easy to find the items they want their customers to find. In fact, at least one hospital system, St. Luke’s University Health Network, headquartered in Bethlehem, Pa., makes it easy to check prices. Its webpage gives patients two price options. Option 1 is a PriceLock price which is an all-inclusive “bundled” prepaid price. Option 2 is a Post-insurance Price which is a price estimate when patients use insurance and pay after a procedure. The procedures are clearly listed. For example, a “CT Scan – cervical spine with and without contrast” costs $600 under both options.

Some insurance companies also have been providing price lists for services. BCBSNC provides a list of doctors and their costs for particular services. Although the list does not cover every procedure, it covers many procedures done in hospitals.

Besides making the prices difficult to find, some hospital representatives claim posting the prices would be misleading. Novant Health told WSOC-TV of Charlotte that “While Novant Health supports price transparency, we do not believe posting standard hospital charges is the best way to achieve this for our patients. Due to differentiating factors, such as health insurance coverage, deductibles and out of pocket maximums, health care costs are simply not one-size-fits-all.”

This is a dubious claim. Of course the actual cost to the patient will depend upon one’s insurance, deductibles, etc., but that does not preclude them from publishing the standard price of the procedure.

Two of the major expenses we face in life – housing and cars – also involve other factors that determine how much we actually pay. The down payments, interest rates and length of loans all play a factor in how much we actually pay for a house or a car. But in both of those instances, we first know the asking price.

Hospitals seem to work in reverse. We never know the asking price and what we pay seems to depend on how much we and our insurance companies can afford.

As for complications, everyone understands that when they arise, the costs will increase, but that doesn’t obviate the benefits of publishing a standard price.

Surely if people in the medical profession can perform complicated life saving operations, then their counterparts in bookkeeping should be able to accurately estimate the cost of a hospital procedure if there are no complications and post that information in an easy to read manner online.

 
 

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