Hospitals always hide costs
HHospitals are not complying with a nearly 2-year-old federal rule requiring them to publish their prices, according to a new study from PatientRightsAdvocate.org.
Their willingness to flout the law is understandable. They make more money when people don’t know how much the medical services they consume cost. But patients and payers should not tolerate this intransigence. This deprives us of information that we could use to foster competition among health care providers and ultimately ensure better care at lower cost.
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PatientRightsAdvocate.org found that hospitals were hiding their prices by reviewing data from insurance companies, which are also required to publish what they pay under a different federal rule that went into effect just three months ago. . The researchers found that insurers had reported prices paid to some hospitals that the hospitals themselves had left blank. United Healthcare posted the prices it negotiated for 16 services at Ascension Seton Medical Center in Austin, Texas, which the hospital had listed as “N/A” in its own documents. Blue Cross Blue Shield released 12 awards Ascension was mum on.
HCA Florida Northside in St. Petersburg, Florida has released pricing for a range of 300 billing codes for a United Healthcare PPO plan. The United Healthcare record, on the other hand, showed “many different rates, each corresponding to one of the codes listed in the hospital’s record,” as the PatientRightsAdvocate.org report states.
Hospitals hide their prices because they don’t want people to know how much prices vary for the same procedure. In Dallas, for example, a C-section at City Hospital in White Rock costs nearly $28,000. The Dallas Regional Medical Center, a 15-minute drive away, charges just over $8,000 for the exact same thing. Some price differences may be justified. Hospitals with higher prices may be able to demonstrate that they provide better quality care. But if patients and payers don’t have easy access to pricing information, they can’t ask why one hospital is charging three times more than another across town.
Transparent prices are likely to encourage competition between suppliers and therefore lower prices. According to a 2021 RAND Corporation study, improving price transparency could reduce US healthcare spending by more than $26 billion annually.
A lack of price transparency benefits hospitals but not patients or payers. The federal government should not let suppliers get away with flouting the law.
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Sally C. Pipes is President and CEO and Thomas W. Smith Fellow in Health Care Policy at the Pacific Research Institute. His latest book is
False Premise, False Promise: The Disastrous Reality of Medicare for All. Follow her on Twitter @sallypipes