Posting charges for hospital services online, as hospitals are now required, sounds like a fairly simple job for IT. The aftermath is what is complicated.
“If people do try to compare prices across hospitals, they will get confused very quickly,” says Gerard Anderson, PhD, professor at Johns Hopkins Bloomberg School of Public Health.
The posted prices are not what patients, insurers, or anyone actually pays. Hundreds of listed line items with dollar amounts, ranging from a half-hour of OR time to gauze bandages to single pills, are enough to confuse even health policy experts, let alone the general public. “The nomenclature is difficult for patients to understand,” Anderson laments. “It differs from hospital to hospital, making comparisons almost impossible.”
Price-shopping patients are eager to figure out which hospital offers the best deal. The posted prices are of no help. “Patients do not want to know how much each line item costs. They want to know the cost of the entire visit,” Anderson says. Patients are not interested in average costs or hypothetical charges. What patients really want to know is the amount they are going to pay. Even if patients could simply total the costs of every line item, they would not find a satisfactory answer. Why? Patients do not necessarily know in advance what services or tests they are going to need.
Informed decisions might be possible if hospitals posted the actual cost of an MRI or an appendectomy. This information, says Anderson, “will be much more valuable. The information systems in most hospitals will permit this very easily.”
To those who say the posted prices only serve to confuse and frustrate patients, a Centers for Medicare & Medicaid Services spokesperson says, “We recognize that at this time this step doesn’t give patients all the information they need. We still believe this is an important first step, and there’s no reason hospitals can’t do more.”
Comparing prices at different local hospitals sounds simple enough. Yet unlike prices of food, cars, or anything else, the connection between cost and quality is unclear in healthcare. “It’s pretty clear that healthcare is not like other commodities,” says Pauline Rosenau, PhD, a professor at UTHealth School of Public Health in Houston.
There are no guarantees in healthcare. Paying more for a surgical procedure does not always mean a better outcome. “A lot of assumptions we make about the relationship between price and quality in medical care are not necessarily true,” Rosenau offers. Even the savviest price-shopping patient cannot really compare costs. If one hospital quotes a lower price, but the patient’s health plan is out of network, it is not “cheaper” at all. Even “bundled” payments, which in theory include everything for a particular service such as a hip or knee replacement surgery, carry limitations.
“Much is unknown when a patient is admitted, prepped, and sent for surgery. Much is unpredictable,” Rosenau explains. For instance, a patient may lose enough blood to require a transfusion. The cost of an identical surgery could vary for different patients.
Surprise bills for facility charges or anesthesia add to the confusion. “Discounts on prices are given by hospitals for all sorts of reasons,” Rosenau adds. Some discounts are offered only to a specific person, as with charity care or prompt pay discounts, while others apply only to certain health plans.
For all these reasons and more, Rosenau concludes, “The posted prices are deceptive and meaningless.”
Patient access department employees who spoke with Hospital Access Management reported surprisingly few calls about the posted prices. Possibly, this is because it is apparent the listings are of very little use to anyone.
Registrars at Genesis Health System fielded a few inquisitive calls. They took the opportunity to explain that the numbers were based on average charges.
“We make sure that patients understand everyone is unique, so their charges could be less or more,” says Aimee Egesdal, manager of patient access for the Davenport, IA-based system.
Myndall V. Coffman, MBA, calls the new requirement “a disservice to patients.” The question most people ask is, “What will I owe?” Posted charges do not answer this question.
“If transparency is the true goal, ensuring patients understand their benefits and true liability should be the point,” says Coffman, system executive director of patient access, scheduling, and financial counseling at Baptist Health in Louisville, KY.
Hospitals are directing patients away from the posted charges and toward their employees who can actually give answers.
“We are providing estimates at scheduling. If they call with questions, they are routed to financial counseling,” Coffman reports.