The pressure is on for hospitals, doctors, and insurers to be more transparent about their prices.
In an effort to lower health care costs in the United States – the highest costs in the world, according to a March 2018 report in the Journal of the American Medical Association – President Trump recently signed an executive order that directs the national Department of Health and Human Services to require hospitals and insurers to disclose negotiated rates for services, as well as provide patients with out-of-pocket costs before their procedures.
Hospitals will have to post these prices in an easy-to-read format, allowing patients to look up how much various procedures cost at any given hospital, and ideally, make informed choices based on price and quality.
If prices are more readily available, many health care experts argue, consumers will be able to wield market forces to their advantage.
Hospitals will then have to compete for their business. Ideally, this competition will yield lower prices and better value throughout the health care system.
“The problem is that no one knows what different services cost and this is by design,” said Robert McDonald, professor of health care systems at Lehigh University and former hospital administrator at the Mayo Clinic in Minnesota.
“Bills have become very complicated and hard to understand,” he said. “Discounts had been provided for some things with no rhyme or reason. It is a lot of smoke and mirrors.”
For McDonald, the lack of price transparency is just another symptom of the failure of the entire United States health care system.
“We are talking about profound change,” he said. “No one wants to talk about how much money they make. There is some evidence that if people know the costs of things, behavior will change. We have to start somewhere.”
Locally, health networks are already offering tools that help health care consumers determine how much their services will cost.
Lehigh Valley-based St. Luke’s University Health Network has a website called “PriceChecker” that provides costs to patients for numerous procedures and diagnostic tests.
“Our hope is that more hospitals will follow our lead and create true transparency pricing like that provided by our PriceChecker tool,” said Francine Botek, senior vice president for finance at St. Luke’s.
Penn State Health in Reading encourages patients to call one of their financial counselors before any procedure to help explore costs and options for charity care and financial assistance. They also offer an online tool to access cost information, called “Understanding the Cost of Your Care.”
As of Jan. 19, the Center for Medicare and Medicaid Services already requires hospitals nationally to publicize what was once closely guarded material, their chargemasters.
Chargemasters are lists of all the services for which a hospital can bill a patient or a patient’s insurance provider. This includes every procedure, test, supply, drug, and other service rendered at the hospital, as well as any fees associated with care, such as room charges.
Despite their online cost determination tools, Penn State Health argues that posted costs can confuse consumers.
“We don’t feel that the raw data about charges is useful to the health care consumer,” said Scott Gilbert, media relations representative for Penn State Health. “In fact, it may be downright confusing. While there is a standard charge list, there is no standard patient, and as a result, people rarely, if ever, pay the standard charge for a procedure. That’s why we have long been committed to providing patients with more specific information that truly helps them make informed decisions about their care.”
James Dilling, a national health care expert with 40 years’ experience in health care administration, believes patients can be misled by posted health care costs. They may see one health care network offers a procedure at a cheaper cost, not realizing that the quality is poor. Or they may assume that a posted amount is the final cost, not understanding that there is no “one size fits all” when it comes to health care.
“Health care will never be simple,” he said. “Doing a knee replacement for a 40-year-old will be different than on an 80-year-old. It needs to be understood that the standard cost is X, but with variables it costs Y.”
Insurance companies are also feeling the pressure to be more transparent. Highmark Health, headquartered in Pittsburgh, introduced its first cost estimation worksheets 10 years ago, and is working to transform this to better fit the health care needs of today.
“We’re moving this information into a tool, ‘find a doctor,’ that people use most, because we know that will make it more easily accessible,” said Stacy Byers, vice president of Customer Experience for Highmark Health. “We’re continuing to investigate how we can bring this information to our customers where they are, not just online, and how we might work together with our provider partners to make it even easier for consumers to get the information they want and need related to cost.”
The varying information coming from insurance companies, government organizations, and health care networks can be confusing, but some experts say change is the only chance at improvement.
“In general, these moves are good for health care,” said Dilling. “We have to keep our eyes focused on what is good for the public and what creates competition, which can help drive down costs.”
“None of us have all the answers,” he said, “but if we can just move the ball forward, we can solve another piece of the puzzle. We need to keep trying in order to get to what works.”