Discounted cash prices could help control costs by letting patients shop for services
A recent study found that a self-pay patient seeking an MRI potentially could save $1,095 by changing hospitals and paying the cash price.
Hospitals had to begin disclosing discounted cash prices when new federal transparency regulations took effect on January 1. Now that this information is available (at least to some degree), will patients be able to take advantage of it and save money by shopping around as they do for other services?
“Availability of discounted cash price data should theoretically allow self-pay patients to price shop and inform targeted policy efforts regarding hospital pricing for the uninsured and underinsured, two important self-pay subgroups,” according to a new study reported in HealthAffairs.
Researchers examined posted cash prices and negotiated commercial and public rates for colonoscopies and magnetic resonance imaging of a lower limb joint at three compliant hospitals. “We chose these two services as they are highly shoppable and highly used, representing a high potential for patient savings,” they said.
The study found that insured patients in a high-deductible plan who have not met their deductible and need an outpatient colonoscopy may have saved (based on the highest negotiated commercial rate at each hospital) as much as $569 at the first hospital, $1,745 at the second and $761 at the third. A self-pay patient seeking an MRI potentially could save $1,095 by changing hospitals and paying the cash price at one instead of the average commercial price at another.
Although these hospitals are not in the same geographic area, which may mitigate the potential savings for patients seeking an MRI, the same differences likely exist at hospitals that are close to each other.
The study raised several questions, according to the authors, chiefly, how trustworthy is the data? ”While our findings are not inconsistent with intuition, this is a case study and limited in nature,” they noted. “Researchers and policymakers should strive to validate these public standard charge data files on a large scale. Existing data sources, such as hospital discharge summary databases, may be beneficial in this validation effort.
“Second, what explains variation in the cash price for a given procedure across hospitals?” The authors noted the “arbitrary and controversial” chargemaster rates used to set prices and discounts.
Finally, the authors questioned how the data will ultimately be used and benefit patients. “Inclusive of travel costs, is there scope for reduction in health care spending by shopping across hospitals?”
Nevertheless, cash discounts show promise for keeping costs in check.
“While there are many questions yet to answer, we believe that discounted cash price could potentially be of great utility to patients,” researchers concluded. “As such, researchers and policymakers should not discount this new discounted cash price data and instead work to validate it.”
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