Consumers may have the legal right to get price quotes from hospitals, but that does not mean it's easy or useful when they do, according to a health policy think tank that used mock consumers to test how accessible the information is in the real world.
The mock consumers found it “difficult and frustrating” to get the price of a common and standard imaging procedure. When provided, prices were sometimes inaccurate, the Boston-based Pioneer Institute found during its survey of 54 hospitals in six states.
The results may come as no surprise. Lack of easy access to prices that allow patients to comparison shop is increasingly an issue for policymakers, employers and households whether they're dealing with a family budget or the nation's economy.
Health plans with high deductibles are increasingly common and households that comparison shop could save money. Published prices could also force hospitals to compete on prices that vary hugely across the country and by market, for reasons that research suggests may be unrelated to underlying costs, the quality of care or the severity of a patient's illness.
Five of the six states where the Pioneer Institute surveyed hospitals have laws that require hospitals to publish prices, provide prices when asked or tell consumers what to do to get prices. The Affordable Care Act also requires that consumers have access to hospitals' standard charges. Regardless, the survey's “consumers” were met with confusion, delays and questions that patients could find challenging to answer, such as the specific billing code for an MRI for the left knee without contrast.
Patients “can't shop for price, even if they wanted to,” said Barbara Anthony, a senior fellow with Pioneer Institute and a former Massachusetts undersecretary of consumer affairs and business regulation, who authored the report (and called a few hospitals herself).
The poor results are similar to prior Pioneer Institute surveys of hospitals and doctors in Massachusetts—which by law requires hospitals to provide a price within two business days—and not surprising, Anthony said. It is troubling, however, as a growing number of consumers with insurance have high deductibles and must spend more before health plans will pick up the bill, she said.
Comparison shopping is also critical for those without insurance. States in the Pioneer Institute survey—California, Florida, Iowa, New York, North Carolina and Texas—are home to half the nation's uninsured. Iowa is the only state that does not have a law on access to healthcare prices.
Prices collected by the survey varied in each market by 200% (Orlando, Fla.) to 1,000% (New York). The surveyors asked for the price of an MRI for the left knee, without contrast. Surveyors found the lowest price ($400) in Los Angeles and the highest price ($4,544) in New York.
Researchers were at a loss to say why prices were so different. “We found no correlation between the number of beds in a hospital and price, and while there were some academic medical centers with the highest prices in a particular area, that was not always the case,” the report said. Market power could be one explanation.
Research published in December using commercial health insurance bills for 88 million patients found higher prices with less hospital competition. More transparency for consumers would help, but it is not enough, said Zach Cooper, one of the researchers of the December paper on market consolidation and prices and an assistant professor of health policy and economics at Yale University.
Collecting accurate price data remains a challenge to any transparency effort, he said. One possible solution would be a national database of hospital prices from all payers, which could be used by developers to create consumer-friendly tools, Cooper said.
Some states have moved in that direction. New Hampshire has created a public website for consumers using medical claims reported by all payers. California recently launched a website where consumers can see the average price for 100 common medical procedures.
Still, consumers struggle to find useful information, in part because of how hospitals set sticker prices and negotiate discounts. Consumers may be quoted incorrect prices depending on which is disclosed.
But without price information “it creates an opportunity for consumers to get fleeced,” Cooper said. Patients cannot find information they need to discover a short drive across town could save them money for expensive services, he said. “For something that costs several thousand dollars, the only way to describe that is insane.”