Under the “Price Transparency of Hospital Standard Charges” regulation, on January 1, 2021, hospitals were required to publish on their website pricing information geared to make individuals more informed consumers of their services. We’re being encouraged to “shop” online for hospital services, much like we do for a car, with the hope that this will encourage lower costs.
Under this rule, hospital prices must list designated common “shoppable services” and 230 additional services that each hospital can select. These might include services like having a baby, getting an MRI, or having a hip replacement. Services are generally non-emergency. Pricing information includes the prices hospitals negotiate with insurers and the discounts they give on cash payments.
Shopping for healthcare services is obviously very different from, for example, shopping for the best price on a car or phone purchase. First, prices need context, one of which is quality of care and outcomes. Second, we are each individuals with our own complexities and a unique set of healthcare provider relationships. Third, while some services may be elective and therefore “shoppable,” still many hospital admissions are unscheduled and most services are made by referral of a trusted physician.
Finally, our insurance plans complicate decisions, and pricing disclosure models need to take these into account. Nonetheless, patients as consumers of services have long been disadvantaged, especially where insurance plans have increased cost sharing and as is evidenced by healthcare costs being a frequent trigger of personal bankruptcy even by insured persons.
Want to see what “price transparency” is really about?
Go to a search engine, type in your local hospital name and add the phrase “price transparency.”
My local hospital has an “Estimate Your Health Care Cost” tool which can be accessed as a patient or as a guest. It comes with a helpful context including a statement of the “high quality” associated with their services. It produces an out of pocket estimate by selected common medical, surgical, or diagnostic testing procedure, adjusted for insurance if input. Emphasis is made that the result is an average, an estimate, and varies by the extent and nature of the procedure. Further, there are guidelines for how to obtain an estimated price on services not listed.
When this price transparency is coupled with data about hospital rankings and success rates (such as c-section rates or transplant survival rates), patients are empowered to make informed healthcare decisions.
ALICEhelps provides a secure, private environment in which to record the data and share it with a designated group of financial advisors/supporters in your community.
The required prices per service include:
- gross charges,
- discounted cash prices,
- payer-specific negotiated charges, and without identifying the payer, the
- minimum and
- maximum negotiated rates.
Price Transparency Requirements are set under section 2718(e) of the Public Health Service Act.
The four categories of services designated by the Centers for Medicare and Medicaid Services are:
- evaluation and management services,
- laboratory and pathology services,
- radiology service, and
- medicine and surgery services.