How much will it cost to see a doctor? Hospitals won’t tell you — Sesame will

Starting January 1, 2019, the federal government now requires hospitals across the United States to post their master price list for each service they provide (known in health care lingo as the “chargemaster”) online.

In theory, this should make hospital prices more transparent and make it easier for people to know ahead of time how much health care will cost them.

Unfortunately, that’s not very likely.

The problems start with how chargemaster prices are set in the first place: they are made up. Hospitals set whatever price they want, and the prices they choose are bloated beyond any measure of what is reasonable for the care being delivered.

Beyond that, the prices being made public are like the rack rate at a hotel — the highest possible price.

Here’s an example: the rack rate for a single cotton ball at New York City’s Presbyterian Hospital is $1.15. That’s about 70 times higher than the going rate at your local drug store.

While knowing the rack rate for all the tools and services at hospitals could, in theory, be helpful for patients looking to comparison shop, the pricing sheets hospitals are providing to the public are filled with jargon and insurance billing codes that just don’t make sense if you’re not a doctor.

Are you in the market for a 6037184? If so, you’ll be excited to know that you can find one for $2,189.29 at New York’s Langone Hospital. Not sure what a 6037184 is? Well, the chargemaster helpfully includes the following description: “MEDICAL/SURGICAL SUPPLIES AND DEVICES — OTHER IMPLANTS.” That should clear it up, compared with the 3,160 other items on the same spreadsheet.

Beyond the absurdity of asking consumers to decode this jumble of raw data and lingo, showing the cost of individual items is rarely useful to patients. If you want to understand how much it will cost to get a knee replacement, it is unlikely you want to be personally responsible for guessing each individual line item on the eventual bill and adding them all up in a spreadsheet on your computer. But that’s the option you now have.

You’ll see individual prices for every component — the knee joint implant, the anesthesiologist, the operating room time, individual medical instruments like screws and scalpels, drugs administered, and all the other gritty, microscopic-level details of your care.

Unless patients receive an inventory of potential supplies and services from their doctor ahead of time, these price lists don’t empower people to understand how much their care might cost. Those kinds of bundled price lists aren’t required — and aren’t easy for most people to find.

Part of the government’s reasoning for pushing transparency in pricing is to help lower healthcare costs for consumers by allowing people to comparison shop. But the master price list is only the beginning of how hospitals price their services.

Even if one hospital in your area has lower listed prices than another, that doesn’t mean it will be cheaper for you. A hospital with a higher listed price may actually offer steeper discounts to people who are uninsured, or whose insurance company has negotiated a better price. The listed price won’t tell you about these price differences and there’s no real way to find out.

It may be hard to believe, but these prices are just a ballpark of what a hospital could charge. Insurance companies have standard rates for each item on the chargemaster and these prices are significantly lower than the hospital’s own rate.

And like buying a car, the only time you pay the listed price at a hospital is if you don’t negotiate. The main difference: most cars are much more affordable.

As a health care expert, the hardest thing for me to see is how this aggressive price inflation is hurting patients.

Time and time again, research shows that — in the absence of any objective rating or scale — people tend to assume that higher prices mean better, more effective care. But there’s generally no link between cost and quality of hospital care. Posting nonsense prices may steer people toward higher-priced options with no actual benefit in quality.

While sharing the prices is a starting point for policy wonks and people working through systemic issues in health care costs, these kinds of thought experiments aren’t useful for helping everyday Americans get the care they need at a fair price.

That’s Where Sesame Comes In

At Sesame, we believe every single person should be able to see what their care will cost before they buy it — just like everything else. With us, the prices are real and what you see is what you pay.

We also believe in fair pricing. To us, that means doctors setting the cost of the care they provide. No middlemen or haggling. When doctors can see what other physicians near them are charging, they can offer a competitive rate to win your business. And it shows when you see those prices.

You’ll also be able to understand the kinds of care you’re buying on Sesame. Every service and specialist on Sesame is described in plain English, not in insurance codes and jargon. Since doctors are selling directly to you without an insurance middle-man, they need to clearly explain what you will receive when you see them.

Part of what makes Sesame unique is that the kinds of care options on our site are the types of things you have time to make a decision about. Unlike emergency care, a voluntary doctor’s visit means you have time compare prices to save money.

We also give you information about each doctor on Sesame so you can see where they went to school, their specialties, their medical board affiliations, and more.

Sesame is a win-win for patients and providers

Just like Sesame is empowering you to make the right decisions for your own unique financial and health needs, we’re also allowing doctors to take control of how much their work is worth.

Doctors are accountable for the prices they set and understand that you (not your insurance) are paying for their services. Doctors treat you better because now they work for you.

And, because doctors aren’t limited by the narrow confines of insurance billing codes, they can offer new pricing models that are better for customers.

How about an unlimited subscription to physical therapy? An annual subscription for primary care? A dermatology bundle to manage acne? A combination of an internet-enabled pregnancy monitoring kit plus visits to your OB/GYN during pregnancy? It’s all possible at affordable prices — only through Sesame.

Sesame is meaningful transparency for consumers

The newly released price lists from hospitals across the country are a sizeable change in understanding how hospitals and insurance companies are billing customers.

But when it comes to change that people can take to the bank, Sesame is the only player giving people the information they need to make informed decisions about the cost of their medical care.