David Sandman

David Sandman

Patients will benefit from more genuine transparency about health care prices and quality.

So it should be good news that a federal rule took effect this month requiring that all hospitals post online the prices of surgery, procedures, and medications. It is fair to wonder why it took so long. Why shouldn’t patients be able to know what a given health care procedure will cost at a given hospital, compare prices across different facilities, and make informed decisions based on their needs and preferences? That’s how it works in virtually all other industries.

But the new rule leaves a lot to be desired. Hospitals are required to post their so-called “chargemasters.” The numbers included in chargemasters often bear no relation to what patients can actually expect to pay, so the information is not especially useful or actionable. As I wrote in public comments weighing in on the proposed rule last year, experts agree that paid amounts, not charges, are the most useful for consumers. In the proposed rule, the federal government itself stated, “We also are concerned that chargemaster data are not helpful to patients for determining what they are likely to pay for a particular service or hospital stay.” And yet, despite their concern, that is exactly what they ended up requiring.

Knowing these limitations, I spent some time looking into how hospitals across New York State had implemented the new rule. Here’s some of what I found and some advice:

  • Make sure you have a lot of time and patience on your hands because it isn’t easy to find the price information. For some of the larger systems, I came up empty handed and couldn’t find it at all. On other hospital sites, the information is buried deep within their websites. If you are relying on the search bars, using the term “standard charges” generally seems to yield the greatest results.
  • A few hospitals require you to register and enter personal information, including your name and email address, before you can view the charges. It felt the opposite of friendly. They don’t require that to use any other part of their websites.
  • I’m happy to report that I didn’t find any hospitals in New York that show only “a blob of incomprehensible script,” as one hospital system in California does. But prepare to be overwhelmed and confused by the information. One hospital actually has more than 73,000 different codes on their chargemaster while a nearby hospital has a mere 8,839. There’s no standard format across hospitals for what information is included and how it’s labeled, and so it’s impossible to comparison-shop.
  • You probably won’t understand the codes anyway, no matter how many or how few there are. I hope you don’t need a “Silverhawk Peripheral CAT” because that goes for $17,466 while a “Namic Manifold” can be had at the same hospital for only $51. I have no idea what those things are other than they fit in the category of radiopharmaceutical supplies.
  • Similarly, you probably won’t be able to tell what you’ll pay for Tamiflu unless you know to look for “oseltamivir phosphate.” But if you do find it, you may see that 30 milligrams costs $217 and 75 milligrams costs $3 at the same hospital.
  • You won’t find an easy way to tell what the all-in price would be for a bundle of services, like for a heart valve repair. But that’s what patients want. People don’t think about their health care in thousands of discrete codes and procedures; they want to know what they’ll pay in total for a knee replacement or to have a baby, without having to add up the price of every painkiller, bandage, and consultation that’s involved.

There’s no shortage of criticism about the new rule; I’ve probably read a dozen articles and blog posts lamenting what a waste it is. I’ve shared some of my own experience and critiques above. But let’s not dismiss the new rule entirely; it sends a signal about the growing expectation for transparency in health care and it opens some doors of opportunity to move further in the right direction.

For example, I found a lot of hospitals in New York that are trying to help their patients understand what they might actually pay for care. The University of Rochester Medical Center is one example. Their website includes the appropriate caveats about the utility of the chargemaster information and also offers resources for patients to get a more accurate estimate of what they would pay. One Brooklyn Health System at Kingsbrook Jewish Medical Centertakes a similar approach. Alongside their chargemaster, they provide a Frequently Asked Questions guidance document and the phone number of their financial counseling department so patients might get more useful information. Almost all hospitals suggest that patients contact their insurer to get a more accurate and customized out-of-pocket cost estimate that reflects their own benefits, deductible, and copayments.

There are also existing tools that are models of how to empower health care consumers with information. There is wide variation in the usefulness and availability of online tools, but the best of them offer user-friendly information and intuitive design. FAIR Health’s YouCanPlanforThis.org allows users to search for price estimates not only for individual medical procedures but also for 25 common conditions and procedures like pregnancy, diabetes, and knee replacement. It also shows estimates for both in-network and out-of-network/uninsured prices, so that consumers have a realistic sense of what they would pay out of pocket.

Another online tool, ExpectNY, developed by the Northeast Business Group on Health, provides information on quality measures related to maternity and newborn care, enabling expectant parents in New York City and Long Island to compare hospitals and make informed choices about where to deliver a baby. Imagine if we could link that easy-to-use quality information — color-coded bar charts accompanied by images showing clearly how a hospital performs on a given measure — with meaningful, understandable price information. That could make a real difference for consumers who are seeking the highest-value care.

Research shows that consumers want price information (as well as information about health care quality) to make better decisions about their health care. The current federal requirement that hospitals publish their charges online is flawed, and its implementation to date doesn’t do much to help patients understand what they will actually pay. But that doesn’t mean that price transparency can’t work.

What it does mean is that simply providing a data-dump of charges, rather than accurate and actionable information, isn’t all that transparent. It’s a first step, because it’s gotten us talking about the issue. But what’s really needed is for hospitals (as well as other health care providers, health plans, and state governments, all of which also play an important role) to share meaningful, easy-to-understand measures that are genuinely responsive to consumers’ information needs. Doing so would actually start to let the light in, rather than just offering window dressing.

By David Sandman, President and CEO, New York State Health Foundation
Published in Medium on January 10, 2019

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