Hospital patients often present
Doctors, nurses and other practitioners are rightly focused on the health of their patients, so questions of price may not necessarily be their first concern. But as health care costs skyrocket — and as health insurance gets more expensive, covers less and requires larger and larger deductibles — patients are becoming more sensitive to the costs of treatment.
In short, they are behaving more like shoppers than patients.
Unlike shoppers, however, hospital patients were often left in the dark when it came to the price of the service or procedure they needed. That’s because hospitals were allowed to keep their “master price lists” secret, or at least closely guarded.
As the Detroit Free Pressreported earlier this month, the Affordable Care Act in 2010 required hospitals to make their price lists available to the public. But on Jan. 1, a mandate from the federal Centers for Medicare & Medicaid Services required hospitals finally to publish the prices they charge for every service or procedure they offer.
Hospital care accounted for a third of all health care spending last year — a total of $1.1 trillion — so the new rules are a big win for transparency in health care costs, right? Not quite.
As Marianne Udow-Phillips, executive director of the Center for Health and Research Transformation in Ann Arbor, Mich., told the Free Press, the published price for a hospital service is “not a particularly useful datapoint.” That’s because these list prices are akin to the sticker price on a new car — in this case they’re the opening bid in negotiations between a hospital and an insurance company. They are not the price that most patients will end up paying.
“This is about empowering patients,” Seema Verma, administrator of the Centers for Medicare and Medicaid Services, told The New York Times last week. That may be, but the execution of the new mandate leaves a lot to be desired.
No two hospitals seem to present information or describe procedures in the same way, the mandate provides no definition of “standard charges,” and the lists are simply impossible for the layperson to decipher. As The Times noted, Vanderbilt University Medical Center charges $42,569 for a cardiology procedure listed as “HC PTC CLOS PAT DUCT ART.”
“The posted prices are fanciful, inflated, difficult to decode and inconsistent, so it’s hard to see how an average person would find them useful,” Jeanne Pinder, founder and chief executive of the consumer health research organization Clear Health Costs, told The Times.
There are other, even more damaging potential side effects. University of Michigan professor Mark Fendrick told the Free Press that he feared patients who require a treatment or procedure will check the price on the hospital’s website, get sticker shock, and decide they cannot afford the needed care — even though what they would actually pay after accounting for insurance coverage and, in some cases, discounts offered by the hospital, would be significantly less.
It’s tempting to laud any effort to get health care costs under control. But simply requiring hospitals to post prices without establishing a system to make the resulting information useful isn’t even a Band-Aid on the problem. In fact, if it dissuades some patients to forgo the care they need, it may do real harm.
A much more comprehensive approach to fixing the nation’s health care system is desperately needed, but we may have to wait until 2020 to see real action on that front.