January 15, 2021 - 9:00 pm
It’s difficult to save money when you don’t know how much something costs until you buy it. Just ask anyone who has received a bill after an emergency room trip.
The soaring costs of medical care are a pressing concern for families, businesses and politicians. This is a complex problem created over decades, in many cases by government interventions themselves. Government, at its various levels, now pays for around half of all medical spending. There is no quick fix. But improvements are possible.
On Jan. 1, a new rule created by the Trump administration went into effect. It requires hospitals to post their prices online in two ways. They must make a computer file available that includes gross charges, discounted cash prices and prices negotiated with insurance companies. Hospitals must also post the prices of at least 300 procedures or “shoppable services.” The Centers for Medicare &Medicaid Services requires this to include “plain language descriptions of the services.” This list must include discounted cash prices and negotiated rates. The CMS does allow the use of price estimator tools.
This shouldn’t be revolutionary. If you’re looking to buy something, one of the first questions you ask is, “How much?” What’s a great deal at $100 might be something you pass by if the price tag says $250.
Incredibly, hospitals sued to prevent this rule from going into effect. One of its arguments was that some prices are “unknowable.” Fortunately, the D.C. Circuit Court ruled against them.
Now that prices are online, it’s easy to see why hospitals worked so hard to keep them a secret. On University Medical Center’s comprehensive price list, the gross charge for a “drill bit 5.0mm cann” — an orthopedic drill bit used in surgeries — is $1,184. But its minimum negotiated charge for that supply is $47. That’s 4 percent of the sticker price. The median negotiated charge is $710, and the discounted cash price is $828. No wonder it often feels as if hospitals pluck prices out of thin air.
Some hospitals make it difficult to find an estimate. When trying to find the cost of an ankle X-ray, Mountain View Hospital’s payment estimator requires you to call if you don’t have insurance. If you do have insurance, it requires you to enter your member ID and patient date of birth. Henderson Hospital charges $1,249 for an ankle X-ray. After its “self-pay” discount, the cost is $500. It doesn’t list the minimum negotiated charge.
It’s true that patients often don’t have the luxury of price shopping when a medical emergency occurs. But there are many interactions between health care professionals and patients for which such information would be highly useful. The incoming Biden administration should continue and expand these efforts to improve cost transparency.