Hospitals start to roll out newly required data on prices and confidential deals

compare-202x300A lot of people in health care across the country are firing up their computers to dig into long-sought, confidential information from hospitals about their prices and deals they cut on them with an array of parties.

As the Wall Street Journal reported, the Trump Administration successfully battled with hospitals to get them to disclose previously secret pricing data, in the hopes that disclosing this key information will benefit the U.S. health care system, notably in curbing costs. Here’s why, as the newspaper reported:

“T]hose who pay for health-care premiums and medical bills — employers, workers and patients — were long in the dark about wide price differences among hospitals for the same service in the same city, according to research and efforts by large employer groups to compare prices. Hospital prices are under intense scrutiny as the sector consolidates and research points to price increases after mergers, but without the quality gains that hospitals often cite as rationale for the combinations.

“Economists say it isn’t clear how the hospital market will respond to public pricing, with the potential for greater competition to lower prices, but also the risk that low-priced hospitals will raise rates to match pricier competitors. Some employers say they have made headway with more aggressive comparison of hospitals and doctors on a combination of price and quality. However, research has found that individual consumers haven’t widely used the tools already available for comparison shopping, and health insurance coverage offers some protection from high prices, leaving patients less sensitive to price differences, said Michael McWilliams, a Harvard University professor of health-care policy.”

Hospitals fought in court and lost their legal battle against the administration’s new regulations requiring public price disclosures, posted on institutions’ web sites. So, as of Jan. 1, a daunting array of hospital pricing information is accessible, if individuals are willing to search around online a little.

It may not be easy. The information may not be readily intelligible to non-experts, starting with its comparison base of prices from “charge masters.” These are a long list of procedures and products that hospitals previously made public and weren’t always helpful. So it will be interesting to see how individuals,  employers, insurers, and competing hospitals react to nuggets such as:

  • Med-Star Washington Hospital Center in the District of Columbia has a daily charge for a routine medical-surgical room (as defined in the charge master) of $3,678.14, but that its negotiated cost with the CareFirst Advantage health plan may be as little as $698.85 or as much as $3,310 negotiated with ChoiceCare.
  • The routine (charge master) rate for a major hip or knee joint replacement at MedStar Georgetown University Hospital runs $45,786.68, though the negotiated price for as much as $68,544.80 in the Kaiser negotiated charge and cost as little as $12,784.72 under the Veterans Affairs Community Care Network.
  • A kidney transplant at VCU Health has a routine (charge master) list price of $253,330, but Magellan Medicare pays 105% of the federal Medicare inpatient-outpatient rate, while Anthem Medicaid pays 100% of that same rate.

Institutions, including Johns Hopkins Medicine, the George Washington University Hospital and the University of Maryland Medical Center, as of the New Year holiday weekend, had posted pricing data, though maybe not the new negotiated prices (if they’re up, they require more than a cursory search using the institutions’ online web site tool). With so many hospitals overwhelmed with dealing with the coronavirus pandemic, it may make sense why the new prices list postings have not been an urgent priority.

Still, earlier experiences with cost disclosures may be pertinent to revisit, as the Kaiser Health News service reported earlier about the charge master postings that “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 … While more information is always welcome, the new data will fall short of providing most consumers with usable insight.”

The administration insisted with the latest data that they be as consumer friendly and accessible as possible. We’ll see. They might benefit patients most, if insurers can be forced to help their customers with a clearer understanding of what their medical services might cost, or if, say employers and patient advocacy organizations used the data to dicker better prices for all. Or will competitors simply jack up rates to match the highest prices posted in town?

As for patients seeking care, can they be helped by rolling through hundreds of medical procedures and trying to compare them from hospital to hospital? It isn’t as if most patients have the experience, expertise, or patience to sort through reams of medical jargon to know if, voila, the procedure they need is exactly the one described. The transparency on prices also may matter far less if time is a great concern. And how do cost disclosures deal with doctor or institutional reputations? If patients believe that Dr. Sawbones performs a given surgery better than any other practitioner in town, or if they think that an oncologist or cardiologist is the best for them, will the posted prices account for what an elite specialist or big-name hospital might want to get paid?

Noam Leavey of the Los Angeles Times has reported on how difficult and stressful it can be for patients to shop around for health care, and how this reality — combined with changes in health insurance, especially whopping premiums and skyrocketing deductibles — may be altering a fundamental aspect of how economists and health policy experts have thought about how Americans pay for health care. Much of the cost-containment thinking was rooted in the idea, under lots of fire now, that efficiencies could be wrung out of the system by forcing patients to put more “skin in the game,” that is to bear a greater share of costs, so they would make better choices and search out cheaper alternatives.

In my practice, I see not only the harms that patients suffer while seeking medical services, but also their struggles to access and afford safe, efficient, and excellent medical care. This has become an ordeal due to the skyrocketing cost, complexity, and uncertainty of medical therapies and prescription medications, too many of which turn out to be dangerous drugs.

Hospitals make up the biggest share of U.S. health care costs, and even though they may realize they need to get themselves under control, few institutions meet even their modest goals to do so, Sara Hansard reported for Bloomberg News’ law section. Hospital costs keep rising ahead of inflation and will account for $1.3 trillion of the nation’s health care spending. But institutions, consolidating to fewer players in markets, have few checks on them, so they keep raising their prices and patients and employers keep forking over the dough.

Maybe greater price transparency, in some form, will be a help with this economic menace. We’ve got a lot more work to do, though, to ensure that hospitals don’t gouge patients so much that they make them financially ill as a cornerstone of their care

Patrick Malone & Associates, P.C. listed in Best Lawyers Rated by Super Lawyers Patrick A. Malone
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