Surprise Medical Bills A Growing Problem Requiring Price Transparency

(A version of this column was published by Forbes.)

Donald Trump’s health reform proposal during the presidential campaign promised to deliver price transparency to health care:

Require price transparency from all healthcare providers, especially doctors and healthcare organizations like clinics and hospitals. Individuals should be able to shop to find the best prices for procedures, exams or any other medical-related procedure.

Doctors and hospitals are infamously terrible at sharing price information with patients. It is a problem for both scheduled procedures and visits to emergency rooms. 

The root problem is not that providers are unwilling to share prices, but that prices are not formed through a normal market process. Instead they are administratively determined between government, insurers, and providers.

All-Payer Claims Databases and Price Transparency

Most observers agree that it is very, very difficult for patients to choose health services wisely based on prices, because prices in U.S. health care are generally not transparent. The primary reason for this is that it has been many decades since health providers have relied on patients to pay their bills directly.

Instead, their business models rely on submitting claims to health insurers. Of course, there are convenient clinics and a few doctors and ambulatory clinics which post prices up front. However, the patient who enters the hospital – where most health costs are incurred – enters a maze of opaque and incomprehensible prices.

Some people believe price transparency can be commanded by government: Enter the “all-payer claims database,” which an increasing number of states are embracing.

Read the entire article at NCPA's Health Policy Blog.

Castlight Health: Pricing for Medical Services is All Over the Map

Castlight Health has published its second annual U.S. Costliest Cities Analysis, which shows astonishing variation for prices of medical procedures. This year’s report focuses on women’s preventive health, finding remarkable variance.

Read the entire entry at NCPA's Health Policy Blog.

Price Transparency Laws Don't Work

In a functioning market, you know what you owe before you buy a good or service. That is not the case in health care, as we know. Because of increasing deductibles, the failure of price transparency is becoming increasingly irritating to patients.

Some believe a solution can be legislated. This has occurred in New York and Massachusetts; and one of my favorite state legislators, Senator Nancy Barto, has tried to legislate it in Arizona
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Effective January 2014, Massachusetts law requires health providers to provide a maximum price for a procedure within 48-hours of a prospective patient asking. Well, it has not worked, according to a ”secret shopper” survey of professionals conducted by the Pioneer Institute.

Read the entire entry at NCPA's Health Policy Blog,

More Price Transparency Problems

Writing in Health Affairs, Ge Bai and Gerard F. Anderson have highlighted the fifty U.S. hospitals with the most “extreme markups” from what Medicare pays to their list prices (from the hospital chargemaster). The paper is written up by Olga Khazan in The Atlantic:

The study found that, on average, the 50 hospitals with the highest markups charged people 10 times more than what it cost them to provide the treatments in 2012.

Read the entire entry at NCPA's Health Policy Blog.

One State Leads the Fight for Health Freedom

When it comes to no-holds-barred, patient-centered health reform, one state is absolutely crushing it: Arizona.

Governor Doug Ducey, a businessman with no direct healthcare experience, has recently signed (at least) three path breaking pieces of legislation.

Read the entire article at NCPA's Health Policy Blog.

400 Percent Cost Difference to Treat Prostate Disease

UCLA researchers have for the first time described cost across an entire care process for a common condition called benign prostate hyperplasia (BPH) using time-driven activity-based costing. They found a 400 percent discrepancy between the least and most expensive ways to treat the condition. (UCLA Health)

Why does this persist?

Read the entire column at NCPA's Health Policy Blog.