Basic Price Information is Not Always Available to Health Care Consumers

Posted April, 26 2016 by Amanda Dunker

Secret Prices

Narrow networks, high deductible plans, and increased cost-sharing can turn up the pressure on consumers to make careful health care purchases. But right now, consumers don’t have the tools to manage this increasing financial responsibility.

This was illustrated in a recent report by the Pioneer Institute, whose researchers called 54 hospitals to ask for the price of an MRI of the knee. Eleven of the hospitals they called are in New York City. The report is a great read, but many people who have tried to research how much a procedure would cost ahead of time already know what’s in it – the researchers were put on hold, hung up on, transferred again and again, and asked to come up with obscure billing codes that are familiar to hospital billing departments but not to consumers trying to shop around for a good price.

The researchers posed as self-pay consumers who were not using insurance – so the difficulty was not due to the challenge of navigating various plans or types of coverage. Hospitals around the country simply could not tell prospective patients what price to expect for this common procedure.

A couple of New York’s hospitals performed very well. Mount Sinai and NYU Langone performed well on all six of the measures – both were able to provide the information with minimal effort on the part of the callers. But the rest failed in ways that really matter for people trying to shop around. At five of the hospitals, researchers had to call six or more times to get their questions answered. Four of the hospitals were never able to completely answer their questions – at three of those hospitals they were unable to answer even after being given a billing code.

If consumers are going to shop around for health procedures, they need accurate information. As the Pioneer Institute points out, both federal and New York state law require hospitals to make standard charges available to consumers. But we’re still a long way from having access to that information.

And what the Pioneer Institute study did not look into but is absolutely vital for making these decisions is information about the quality of services. The researchers identified huge variations in the price of an MRI among the NYC hospitals – from $428 all the way to $4,544. Similarly huge variations exist for other procedures that pose greater risks to patients. Quality information provides the context necessary for using cost information sensibly – neither the cheapest nor the most expensive option might be the best choice. The key word is value – even if the problem of price transparency is solved, prices don’t mean very much if they can’t be connected to performance.




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