On July 15, 2021, we published a blog titled “No Rhyme, No Reason,” which examined some seemingly nonsensical pricing structures.(1) There have been no shortages of media reports that amplify these hospital price transparency issues, and some even provide strategies to avoid them. We will address the latter this time around.
If possible, plot your course of action for best results
As we stated in the previous post, aside from the overall high cost that some of these procedures represent, the intriguing and surprising things are the comparative prices dependent on the setting and delivery of care. However, some tools are available that can significantly reduce your costs when combined with patience and detective work.
First, knowing where to expect higher charges is essential, especially since healthcare has some of the least transparent pricing of any economic sector. As we previously pointed out, it will generally serve you well to remember the “captive audience” idea. At hospitals, the price of everything is almost always multiple times more than in other settings. With fewer choices come higher costs. Whenever possible – and admittedly that is not always possible in these situations – do not reflexively utilize a service or product without considering the costs. There are also less expensive places where this care could be available, such as a doctor’s office, imaging site, or outpatient center. That said, you can still compare prices among hospitals, which also can widely vary.
One recent article from The New York Times, “How to Look Up Prices at Your Hospital, If They Exist,” examines the wide pricing variables found by comparing procedures from multiple hospitals.(2) They recommend that before you begin, you know the name of your insurer, what kind of health insurance you have, and other variables like whether it is an HMO or PPO. Then you can start shopping by entering the name of the procedure and hospital name. Search results will display something to do with “price estimates billing” or “patient information.” You might find the information at the bottom of a page or by following subsequent links. Digging further, you should look for something like a “comprehensive machine-readable file” or “negotiated price list,” “standard charges,” or a “chargemaster.” This likely is the data you are seeking. Unfortunately, the federal government has not required standardization in their formatting and presentation of pricing data like the easily interpreted nutritional guides on food and drug packaging. I believe that uniformity will be the next step to making it even more user-friendly.
Another resource is Turquoise Health’s beta version, a pricing comparison site.(3) We have utilized this one to some positive results, and as it evolves may prove to be a powerful tool for consumers.
The US government passed the Hospital Price Transparency rule, and hospitals were required to comply with federal law on January 1, 2021, by posting their pricing. Numerous systems still have not. The government has said it plans to increase the penalties for non-compliance from $109,500 annually to as much as $2 million.
Finding Non-Compliance Issues? Report Them!
Consumers do have an option if they find that an entity is not posting its pricing. The Centers for Medicare and Medicaid Services (CMS, cms.gov) has a page where you can submit a complaint.(4,5) With increased reporting, repeated reports of non-compliance, and corresponding fines, this vigilance should positively impact data.
Being an active, educated consumer is your best protection against excessive hospital charges.