Ms. Ni had a high deductible insurance policy, and she paid $7,750 out of pocket. Her insurer, able to negotiate a discount, paid $67,088. By the way, Ni’s insurer is raising its premiums.
Dr. Marty Makary, Professor of Surgery and Health Policy at the Johns Hopkins School of Medicine, and an advocate of price transparency, points out over at Market Watch that what Ms. Ni paid out of her own pocket would have covered the entire cost of the same procedure at the respected Surgery Center of Oklahoma, which requires cash and posts a menu for its prices.
Americans are hungry for honesty in health care.
The Trump administration announced a price transparency rule that stipulates that hospitals must post prices for 300 common procedures. These are procedures that could be performed at a number of medical outlets. Hospitals must also disclose the heretofore secret negotiated discounts with insurers. Patient fees make such deals possible.
Makary is also encouraged by the number of start-up websites that reveal costs of procedures in the same way that other websites disclose airline fares. Hospitals have been reluctant to reveal their prices to these websites, but the ones that refuse are losing business, according to Makary. Makary saw how this works when he came to the assistance of a patient who’d been charged $5,000 for an abdominal CAT scan. Here is how it works:
On a recent trip to Carlsbad, N.M., to help a patient who was overcharged for a CAT scan, I decided to walk over to the hospital’s radiology counter to ask how much a CAT scan of the abdomen actually costs. I gave the radiology representative the exact medical code for the procedure. She said it would cost “about $5,000,” which translates to a direct out-of-pocket cost of $5,000 for many out-of-network patients and those with a high deductible.
Knowing the price should be much lower, I explained my frustration at the price and pointed out that other imaging centers charge far less. She responded by whispering to me “OK, if you go to MDsave.com, we list it there for about $500.” Actually, $522 to be exact, when I checked the website.
Why does a hospital drop its prices so dramatically on a competitive website? That’s the power of transparent markets.
The Johns Hopkins surgery professor sees market transparency as the key to curtailing surprise bills:
A fundamental problem in health care is that we have non-competitive markets. While policy makers may feel tempted to just set a price cap for surprise bills or drugs, the better and more disruptive idea is to actually make markets competitive on price and quality. And though price transparency is not the silver bullet to lower health-care costs, it is a necessary first step.
Hospitals won’t go broke if they practice market transparency, according to Makary. Surgery centers that engage in real price transparency are reporting a 50 percent increase in patient volume and a 30 percent increase in revenue, according to one study.
The bottom line:
Americans are hungry for honesty in health care.
Read the entire article.