Still No Transparency in Medical Pricing

Entrepreneur David Williams has good insight into the limits of Health Savings Accounts as tools of consumer empowerment, discussing:

…… a consumer who did his darndest to find a good deal on a CT scan, finally settling on the $475.53 price at Coolidge Corner Imaging.

But the bill he got later was for $1,273.02 — more than twice as much — from a hospital he had no idea was connected to the imaging center.

“I was shocked,” said White, a doctor of physical therapy who thought he knew his way around the medical system. “If I get tripped up, the average consumer doesn’t have the slightest chance of effectively managing their health expenses.”

The patient wasted tons of time and effort trying to get the problem cleared up. He cared since he had a high deductible plan.

In my view, high deductible plans are a pretty crude instrument to encourage cost consciousness and price transparency. (David Williams, MedCityNews, June 2, 2015)

I agree. NCPA has long championed HSAs. However, stories like the one discussed here are too common. HSAs need to become more than a way to shift costs from premium to out of pocket. Health insurers need to get out of the business of fixing prices.

If we had not been distracted by Obamacare, we might be there by now. Hopefully, we’ll be back on track before too long. I have proposed a “common law” solution to the problem of price transparency. Read more about it here.

Comments (4)

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  1. Barry Carol says:

    The lack of price (and quality) transparency has to be one of the most frustrating issues in healthcare from a patient’s perspective. I wonder if the people who determine these charges ever thought about how they would like to be on the receiving end of the bills and to not get a definitive estimate that they could count on of what a particular procedure would cost before services are rendered.

    The legislatures of both NJ and CT are grappling with this issue right now especially as it relates to surprise hospital bills and bills from providers who turn out to be our of network. There clearly needs to be some reasonable definitive limit on how much can be charged. I would add that when patients sign forms agreeing to be financially responsible for charges, they are implicitly agreeing to pay a REASONABLE amount for care and not some unconscionable and outrageous sum that bares no relationship to either the cost of providing the care or its value.

    It seems pretty clear to me that providers, especially hospitals, still don’t view patients as their customers. They view payers – Medicare, Medicaid and commercial insurers as their customers. That needs to change. Until there are some clear adverse consequences for hospitals that refuse to provide patients with binding cost estimates for non-emergency care, nothing will change. For emergency care, there needs to be legislated limits, probably some reasonable percentage above Medicare, on how much can be charged.

    • There have been lost of attempts without success. With respect to signing a form taking financial responsibility, I very much agree.

      It is kind of like binding arbitration for medical malpractice. They can’t just make you sing a waiver on a gurney. There has to be a period of time to ensure informed consent.

  2. Bob Hertz says:

    As Barry and John have noted before, we must eventually have legal limits on unexpected and undisclosed hospital bills.

    In my reading on this issue, which is pretty extensive, almost 100 per cent of the contentious cases involve persons under age 65 and with less than comprehensive insurance. A cynic would say that hospitals are trying to make up for their losses on managed care and govt programs, whenever they have a chance to bill someone who is not protected.

    A few states do have laws under which an uninsured person who is low-income cannot be billed more than what a hospital is paid by its largest insurers. We could extend such laws to cover any patient at all, regardless of income or insurance status.