American consumers know more about the quality and prices of restaurants, cars, and household appliances than they do about their health care options, which can be a matter of life and death. While we have made some progress in getting consumers reliable quality information thanks to organizations like Bridges to Excellence and The Leapfrog Group, for most Americans, shockingly little information still exists about health care prices, even for the most basic services. And several studies have shown us that the price for an identical procedure can vary as much as 700 percent with no difference in quality. Moreover, with health care comprising 18 percent of the US economy and costs rising every day, it is extremely troubling that most health care prices are still shrouded in mystery.
Our organizations have been steadily pushing health plans and providers to share price information more freely, and we are seeing progress. But public policy—or even just pending legislation—can provide a powerful motivator as well.
Unfortunately, our new Report Card on State Price Transparency Laws shows most states are not doing their part to help consumers be informed and empowered to shop for higher value care. In the Report Card released Monday, 72 percent of states failed, receiving a “D” or an “F.” Just two, Massachusetts and New Hampshire, received an “A.” The Report Card based grades on criteria including: sharing information about the price of both inpatient and outpatient services; sharing price information for both doctors and hospitals; sharing data on a public website and in public reports; and allowing patients to request pricing information prior to a hospital admission.
While most states have laws that met few, if any, of these criteria, Massachusetts and New Hampshire met many of them. In 2003, the New Hampshire Legislature mandated the collection of claims data from all commercial insurers in the state. These data were used to create the New Hampshire Comprehensive Health Information System (NHCHIS) dataset, which can calculate prices for common procedures. A public website was launched in 2007, providing consumers, both insured and uninsured, with an estimate of their own out of pocket responsibility compared to the price of the entire procedure or treatment.
In 2006 and 2012, Massachusetts enacted legislation that required the collection and public reporting of cost and quality data for procedures and diagnostic tests. MyHealthCareOptions provides consumers with the ability to compare prices and quality of physician practices and hospitals based on location or specific conditions and procedures.
While these two states are leading the pack, their legislation is by no means perfect. That’s because the data, however comprehensive, fails to provide a consumer-patient with personally relevant information at the time of need. Having general comparative information using one to two-year old data is important, but insufficient. Imagine the consumer outcry if, for example, supermarkets posted 2011 prices but charged 2013 prices when the shopper gets to the cashier. And yet that’s what the “best” states have to offer.
As such, health plans can and should help by making sure their cost calculator tools, available to plan members, are robust and meet all of Catalyst for Payment Reform’s Comprehensive Specifications for Consumer Transparency Tools. Employers should be allowed to take their own claims data, including the price components, to third-party vendors, like Castlight Health or Change Healthcare, to build more customized shopping tools for their employees. Some health plans, however, prohibit self-funded employers from doing this. And some hospitals institute “gag” clauses in their contracts with health plans to prevent them from disclosing the prices they bill. Consequently, more comprehensive state-based legislation could ensure that consumer-patients have an unalienable right to get relevant, timely, accurate and personalized information on the comparative costs of common procedures for hospitals and physicians in their network.
We plan to update the Report Card on an annual basis and hope to observe measurable progress, because, unfortunately, we expect to see health care costs continue to rise, and consumers continue to assume a greater share of the cost. It’s time consumers and the employers who still pay most of their health care bills had comprehensive, accurate information about health care prices. Let’s hope the 2014 Report Card yields more “A” grades, and that those getting an “A” are truly at the top of the class.
Suzanne Delbanco is the executive director of Catalyst for Payment Reform, and Francois de Brantes is the executive director of the Health Care Incentives Improvement Institute.
Categories: Uncategorized
I really have no idea why in the USA the health care is so expensive. I live in Europa and the prices are way way way lower. A simple procedure gastroenteroscopy US costs $5000. The same procedure was done to me in Europa for 300 euros in Germany. In France costs about the same. Are the american doctors so special???? I think that the government has to finally realize that health care should not be a business only. It is the most important thing in a country. In USA they will not do test if you have no coverage and you can’t pay. The medical profession in Europa is very respectful, but doctors there are not millionaires like here. A doctor must be compassionate and not think of his profession as a way to become a millionaire, but a way to help sick people. Both my parent ware doctors. Now they are retired in Europa. They ware stressed from the fact that in the USA the first question in the hospital is COVERAGE??? So all comes down to money. And this is outrageous!!! In the USA , a country that pretends to be the greatest of all the healthcare should be free like the rest of the civilized world. The only reason that is not, is because of the ridiculous prices of the procedures and care. And the Americans should go out and protest and demand such a change!!!! Not just blog and comment while the big corporations and hospitals are making billions on the taxpayers back!!!!!!!!!!
I totally agree. Every single state must help it’s people gain access to health care prices. People must know all the necessary costs procedures.
I agree, the people must be thoroughly informed about the cost of all medical procedures. It doesn’t matter what kind of insurance you have or if you are paying less than other individuals.
This could have been an out-of-network provider and they billed charges and would not take anything less (no write-off) from the payor.
The Hospital for Special Surgery in NYC is a go to hospital within its specialty of hip and knee replacements and related procedures. It has very significant local and regional market power within that niche. Its negotiating approach with insurers is very similar to that of Partners Health System in Boston and both are able to extract well above market prices for their services, tests and procedures. The Hospital for Special Surgery doesn’t even accept most of the local Medicare Advantage plans but it does accept standard Medicare.
This is part of the reason why we need disclosure of actual contract reimbursement rates coupled, hopefully, with some credible measure of quality so both patients and referring doctors can be made aware of significant local price differences among providers for the same work. Hopefully, more patients would then wind up getting their care from the most cost-effective high quality providers while the most expensive competitors in the market would lose market share and ultimately have to lower their prices to remain competitive.
Separately, when Memorial Sloan Kettering stopped using an expensive colorectal cancer drug called Zaltrap because it was more than twice as expensive as a competitive drug and no more effective, Sanofi Aventis, the manufacturer of Zaltrap, after initially complaining, cut its price by 50% within four weeks of MSK’s action. We need a lot more of that and we need to outlaw the confidentiality agreements between insurers and providers that preclude providers from disclosing actual contract reimbursement rates.
Hey, Legacyflyer — it’s one of the most expensive insurance payments we’ve seen for that procedure. We more commonly see less expensive ones, but it’s still true that big payments like this exist in this marketplace. Listen to Bostonians talk about Partners, and you’ll hear much of the same.
You just don’t see these high prices, because the market’s opaque!
We’re here to help.
JayM
Well, we are going to have to agree to disagree.
As far as I am concerned the “price” is what someone agrees to accept for a good or service. In other words, the actual amount that changes hands, not what is published in a list somewhere.
Perhaps a better way to look at it is to split “price” into; “list price” and ‘sales price”. So for example, the “list price” of a Chevy would be MSRP or say $30,000. The “sales price” could be $25,000.
Similarly, the ‘list price” of an MRI might be $2,300 but the “sales price” might be $400.
I agree that it is unfortunate that we are not allowed to (offficially) discount our prices to self pay patients. Unfortunately, if we did so Medicare could sue us for fraud (we are offering a lower price to someone than we do to Medicare) and the Insurance companies would also complain.
I will tell you what I do when the problem is presented to me. I am told that we have to bill the “full boat” for the reasons stated above, but I tell the patient to pay what they can and think is fair.
Aww crap. .I wish I had a way of editing my replies.
I have to recant
I don’t count the amount that insurance adjusted in the amount paid.
My equation up there is off.
Primary Insurance payment+secondary ins payment + patient payment = Amount paid
whereas
insurance payment + insurance adjustment + secondary payment + secondary adjustment + patient payment = Price
It may be arguing symantecs but I think its important to the topic to be clear on definitions.
The price is the amount of money a Doctor/Hospital charges for a procedure.
The amount paid is the total of the insurance payment + insurance adjustment + secondary payment + secondary adjustment + patient payment
What ends up being Paid is not going to be anything what the original price was. therefore I content that Price != amount paid.
Its important because its part of the problem with healthcare costs is that you aren’t allowed to show mercy upon the self-pay patients and charge them anything less that what you charge everyone else.
(best believe those prices take into account what will be adjusted off)
Perhaps the solution is for your Insurance Company to go out of business since them seem to be incompetent. Either that or they didn’t tell you the truth.
Normally, insurance companies are smarter than that and deal with the problem of high priced test by requiring pre-approval and sending patients only to certain providers.
Depending on what the study was, we probably get 1/8 to 1/10 of what your insurance company (allegedly) paid.
Something is fishy here.