Tuesday, February 25, 2014

Bringing Health Care Prices Out in the Open

Face the facts with both eyes open.


According to Melinda Beck in the February 24 Wall Street Journal, 

“There a major effort underway to make sure patients know what they’ll  have to pay -  before they make any decisions about treatment. Some  people think it will make all the difference.”

A few doctors have responded to this effort  by posting prices in their offices,  but hospitals and health plans have largely ignored the effort.

Still,  the entry of ObamaCare  endorsed health plans with their high deductibles  onto the health care market may  trump this reluctance  to make prices known in advance.  ObamaCare’s bronze and silver plans have average deductibles of $6000 and $10,386 respectively.  

These deductibles  are unaffordable for most people and it is speculated  will surely   make cash-strapped consumers blink.    Consumers are expected and advised  to react by shopping around on the Internet or by asking hospitals and doctors what they charge before taking the health care plunge, just as they do before buying a computer or a car.

Shopping around for elective care makes sense, for prices vary, even within the same city.

Here, for example, are the prices for evaluating chest pain in Los Angeles.

·         Sherman Oaks Hospital, $13,133

·         Garfield Medical Center, $52,590

·         Cedar-Sinai Medical Center, $43,715

·         Los Angeles Community Hospital, $15,316

·         LAC/Harbor-UCLA Medical Center, $15,835

Price variations can be stunning, as much as 7 times from one hospital to the next.  The California Public Employees Retirement System  found hip and knee replacements in San Francisco ranged from $15,000 to $110,000.

Prices also vary by insurer.  In Dearborn, Michigan,  these are the prices for a knee, hip, or ankle MRI
  •      Hospital “chargemaster,  $2844
  •   Cash, $695 
  •   UnitedHealth, $1990·        
  •  Blue Cross, $617
  •  Aetna, $520 
  •   Cigna, $341-$362
  • Medicare, $335
It’s all a little bewildering and time-consuming, tracking down these costs.  And it’s hard to discern where hospitals stand on the issue of cost transparency.   Rick Umbdenstock, president of the American Hospital Association, insists hospitals are “absolutely in favor of price transparency”  and have a bill in Congress  to let individual states determine price-disclosure rules.   But Umbdenstock adds, government and insurers’ policies make change difficult.

If, as a consumer, you are persistent, you may be able to find out a price for a test or procedure on The Healthcare BlueBook, Pricinghealthcare.com,  or, through UnitedHealthGroups’ my Healthcare Cost Estimates.   But these sites don’t list all prices for all cities or states.   The consensus of the experts is that price transparency  can  transform and reduce health costs, and diligent shopping can reduce costs and help consumers make better choices.   

 But the hunt for better prices will not tell you much about quality –  comparative outcomes for the buck.   That’s another kettle of fish.

Tweet:  A movement is growing in the U.S. to bring out into the open what insurers, hospitals, and doctors pay before  undergoing a test or a procedure.

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