Transparency regulations falling short of making pricing information more accessible
A team from GoodRx tried to make sense of posted prices for common hospital procedures.
Health care pricing often remains as confusing as ever, despite new transparency rules that went into effect on January 1.
“Routine labs and tests are some of the most shoppable health-care services,” said Lauren Chase, a researcher for Good Rx. “Since patients can book their tests ahead of time, they have the ability to price shop. With our unique knowledge of the intricacies of health-care pricing, coupled with our data-savvy team, we assumed we had a leg up in diving into the data and showing consumers just how important, and hopefully easy, it would be to price shop.
Related: Work in progress: Price transparency efforts need to go further
“We were wrong. After weeks of meetings and hours scouring hospital pricing data, we found that patients could overpay by more than $10,000 for an MRI.”
Researchers found significant price variation among hospitals. X-ray prices were as low as $26 or as high as $1,355. The contrast, however, was most stark for brain MRIs. The spread for the cost of an MRI ranged from $213 to $12,383. There also were price variations within hospitals. One listed cash prices of both $3,324 and $2,108 for a brain MRI. With an internal charge code as the only thing differentiating these cash prices in the data, it’s impossible to tell which one would apply.
The team then looked at labs such as the basic metabolic panel and lipid panel, which identify health risks based on levels of substances in a patient’s blood. Here, too, it observed large price variation among hospitals for common lab procedures. Cash prices for HbA1c, a lab used to test for diabetes, ranged from $14 to $665. The basic metabolic panel, which tests for eight different substances, had a minimum cash price of $24 and a maximum of $1,275. And while most lipid panel prices were under $300, one hospital charged a hefty price of $2,489.
Although price variation doesn’t have one clear driver, some factors that affect cost include location and type of facility. Although prices may be influenced by state, there even can be enormous price variation within a city, which shows how a little pricing shopping can go a long way.
Depending on what service someone is price shopping for, they may need further knowledge on billing practices or medical terminology to fully use the information provided. If that weren’t enough, price shopping is time-consuming and requires persistence and tech-savviness to find relevant information.
“In an ideal world, patients could use chargemasters to compare the prices on services they need by their insurance type and across multiple facility types in their area,” Chase said. “They would be able to trust that what they saw would be what they paid. But for now, this is largely not the case for the average patient. Complexity, unreliability and variation of data make price shopping impractical.”
Researchers continue to investigate the value of hospital chargemasters, while CMS attempts to encourage compliance.
“Some have estimated price transparency could reduce spending by $8.7 billion, but other more aggressive policies could be more effective, such as regulating hospital prices,” she concluded. “With more rulings on transparency set to take effect in the coming years, we have yet to see the full impact of these requirements.”
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