Pricing transparency: Doctors, patients, and insurance companies on the same page
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by Pat McNees (updated 1-14-19; original post 10-10-15 was 'Taking the mystery out of health care prices')
Can we lift the veil on health care prices? Are we moving toward pricing transparency (getting doctors, patients, service providers, and insurance companies on the same page)? When our doctors send us for tests and procedures, must we be like the dinner guest in a fancy restaurant who is handed the menu without prices? How many of us know up front what a colonoscopy costs -- or how much charges for any procedure vary from one clinic or doctor to another? What does an MRI cost? Are prices uniform or predictable?
Until recently, it has been difficult to know in advance what a particular health problem or procedure will end up costing us, as patients. Or how much health care costs vary between practices, cities, and states. Some things are changing, but you have to do your homework to be a smart health care consumer. The following articles shed light on a changing system and improvements in which information consumers have access to.
• As Hospitals Post Sticker Prices Online, Most Patients Will Remain Befuddled (Julie Appleby and Barbara Feder Ostrov, KHN, 1-4-19) "As of Jan. 1, in the name of transparency, the Trump administration required that all hospitals post their list prices online. But what is popping up on medical center websites is a dog’s breakfast of medical codes, abbreviations and dollar signs — in little discernible order — that may initially serve to confuse more than illuminate....That’s because the price lists displayed this week, called chargemasters, are massive compendiums of the prices set by each hospital for every service or drug a patient might encounter. To figure out what, for example, a trip to the emergency room might cost, a patient would have to locate and piece together the price for each component of their visit — the particular blood tests, the particular medicines dispensed, the facility fee and the physician’s charge, and more....And there’s this: Other than the uninsured and people who are out-of-network, few actually pay full charges....Even when consumers do locate the lists, they might be stymied by seemingly incomprehensible abbreviations....Nevertheless, some experts say that merely making the charges public shines a light on the often very high — and widely varying — prices set by facilities....Billing expert George Nation, a finance professor at Lehigh University, said that rather than posting chargemaster lists, hospitals should be required to provide the average prices they accept from insurers. Hospitals generally would oppose that, saying negotiated rates are a trade secret."
• In Health Care, A Good Price (Or Any Price) Is Hard To Find (Jenny Gold, Reporter's Notebook, KHN, 9-14-17)A recent story about why Northern California is the most expensive place in the country to have a baby began as a tip from an obstetrician. Dr. Sarah Azad told me that insurers were paying her just a third of what they pay doctors employed by large hospital systems in her town of Mountain View, Calif. "As it turns out, the vast majority of contracts between doctors or hospitals and insurance companies are subject to a gag clause, which prohibits either party from disclosing negotiated rates. That means it’s almost impossible for consumers, researchers or journalists to find actual, accurate numbers, despite the fact that cost differentials among doctors can be so stark.... I have long understood that the lack of price transparency is one reason our system stays so expensive. It was a surprise, though, to find out that this opacity is cemented by legally binding contracts....It’s no accident that data on physician costs are so hard to find. Its inaccessibility allows hospitals to keep raising their prices. It’s simply not in their interest for the public to know how much they’re charging. And insurers don’t want other doctors or hospitals to see the high prices they’ve agreed to pay, for fear they would demand the same....In the end, all of us — through our insurance premiums and our taxes — pay a price for non-transparency."
• The Risky Game One Doctor Plays To Help Patients Find Affordable Insulin (Martha Bebinger, Commonhealth, WBUR, 4-19-18) "There are several websites that list the cash prices for insulin and hundreds of other drugs. But most of [Dr. Hayward] Zwerling's patients have health insurance, and each health plan varies. When Zwerling meets with patients, he can't tell what the copay will be for each drug. He doesn't know if the patient has met their deductible. Those on Medicare may be in the so-called doughnut hole. The brands of insulin Zwerling prescribes are covered by some plans, with varying costs for members, and not others. And the negotiated price for each drug may be different from insurer to insurer and pharmacy to pharmacy....There are some remedies in the works. CVS Health has just rolled out a program that lets pharmacists show patients the cost of a prescription before they fill it, as well as cheaper options....Massachusetts is, in theory, ahead of many states because doctors, hospitals and insurers are required to help patients find the price of services. But that requirement does not apply to pharmacies or prescriptions, and there's no move to amend the law. That's disappointing to some consumer advocates."
• Truecostofhealthcare.org (David Belk MD's site is a "treasure trove of information and analysis for journalists and highly regarded by academics as well" (Randy Barrett, AHCJ, Spring 2019) Hover over the heading "healthcare" and dig deep into material under subheads: Medications, Pharmaceutical Industry, Billing, Medicare, Hospitals, etc.
• Clear Health Costs: Cracking the Code Coverage. In April 2017, New Orleans PriceCheck, reporting on and crowdsourcing health prices with partners WVUE FOX 8 Live and NOLA.com/The Times-Picayune, began saving its readers and listeners lots of money by comparing health care prices publicly. Says Jeanne Pinder, "We use shoe-leather journalism, data journalism and crowdsourcing to reveal the mysteries of pricing. The project is on fire, with hundreds of people sharing their stories, commenting, and sending in their EOB's [explanations of benefits]. The hospitals are extremely upset with us, and we have been able to save people hundreds of dollars Read More