What’s it going to cost? Wide variation in prices for hospital care.
How one person “shopped around” for surgery using the new hospital price tools required by the federal government
As a college student still on my parents’ insurance, I never considered my health care costs. But as I get older, I need to pay more attention to make informed financial decisions. I’ve always been taught to check out prices and shop around before I buy. But when it comes to health care, that isn’t so easy.
A new federal rule that took effect this year is designed to help Americans planning inpatient treatment to shop around for best prices. The hospital price transparency rule requires hospitals to disclose the prices of 300 common procedures in a consumer-friendly online format.
However, when I decided to test how well the rule works by “shopping” for arthroscopic knee surgery, I was surprised by how difficult it is to make an informed choice, even with this information newly available.
To start, not all hospitals comply with the rule. One study found 65 of 100 of the largest hospitals (by bed count) in the United States were not posting prices as required. Additionally, because the rule does not apply to non-hospital health care settings, including specialty care centers and ambulatory surgical centers (ASCs), it limits the ability to compare prices in the area. Considering 41 percent of surgeries in the United States are performed in these outpatient settings, the lack of price information at ASCs means a consumer can’t see all of their options.
Unsurprisingly, the first challenge I encountered was finding cost estimates at each of my local Boston-area hospitals. I looked at prices for my alleged surgery at St. Elizabeth’s Medical Center, Tufts Medical Center, and the Mass General Brigham health system. After some digging, I found easy-to-use cost estimator tools under “patient and visitor information” at Mass General Brigham and St. Elizabeth’s. Once I entered my insurance information, the calculators revealed my estimated cost of surgery. Tufts Medical Center lacked a similar online tool. Instead, I had to download a spreadsheet of all their procedures and negotiated rates. I was able to find the average cost for the procedure with my insurance provider, but not everyone will know how to do this, and it certainly doesn’t meet the new requirement for consumer-friendly price estimators.
I was quite surprised to see the wide variation of prices. Costs ranged from $7,330 to $20,738 before insurance and from $1,738 to $3,905 after insurance.
Even within the Mass General Brigham hospital system, which has multiple locations, prices ranged from just over $12,500 to nearly $21,000. This nearly $8,500 difference should startle any potential patient trying to navigate surgery prices with spotty price-matching tools.
It made me wonder why there was such a wide variation in prices. Would I be willing to pay an extra $1,000 if my recovery time was shorter or my risk of infection was lower? Maybe, but I don’t have the necessary safety and quality information about each medical center to make this decision. In health care, the maxim ‘you get what you pay for’ may not always apply.
Despite its shortcomings, this price transparency rule is a good first step to getting consumers information that hospitals have kept hidden. After using the new tools, I felt more informed about prices at my area hospitals. Moving forward, federal regulators need to follow up and enforce these rules so that 100 percent of hospitals post prices. The requirement should also be expanded to specialty care and ASCs to cover more patients and their needed treatments and procedures. To complete the ‘shopping’ experience, patients also need quality information about a hospital’s care and patient outcomes. With increased transparency, even young consumers like myself will be more capable of making price-conscious decisions about their health care.
Originally published at https://uspirg.org.
