Californians Struggle To Find Accurate Medical Pricing

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California residents are having difficulty obtaining accurate price estimates for medical procedures despite a state law requiring hospitals to publish average charges for common procedures on a state website, the Los Angeles Times reports.

Barriers To Finding Accurate Pricing

Although the law -- enacted in 2006 -- requires hospitals to publicly post average charges for common medical procedures, most facilities do not list prices on their own websites, where residents are more likely to seek cost information.

In addition, the prices listed on the state Office of Statewide Health Planning and Development website often are not what people actually pay for a procedure. Insured patients would pay a smaller amount than listed on the site, depending on the price negotiated by their insurer. In addition, prices provided by hospitals contacted by the Times often did not include physician costs or other related expenses.

David Byrnes, spokesperson for OSHPD, said the agency does not have the authority to request additional hospital data beyond billing charges.

Meanwhile, insurers cannot provide detailed data that include specific names of hospitals or clinics because they would be in violation of contracts with health care providers.

California Insurance Commissioner Dave Jones (D) said he wants more consumers to have access to insurers' pricing information. He said, "Consumers don't really know the health-cost consequences of their decisions," adding, "and they have more of their money at stake."

Pending Legislation

State Sen. Ted Lieu (D-Torrance) has offered a bill that would require hospitals to disclose all potential charges for medical procedures -- including all physician and lab fees -- in certain cases. The Senate is scheduled to conduct a second hearing on the legislation later this month.

The California Medical Association and the California Hospital Association are concerned about the measure. The groups say hospitals should not be responsible for providing physician charges because doctors are independent contractors and cannot be employed by hospitals under state law.

The California Medical Association says insurance companies are better positioned to assist residents with questions about out-of-pocket costs.

Molly Weedn, spokesperson for the group, said, "We have to ask whether we want physicians focusing on paperwork or treating patients" (Terhune, Los Angeles Times, 4/15).

Donald Stumpp
"Perhaps a truer pricing disclosure would be posting what hospitals receive in actual “average” reimbursement for most common procedures from all payers for the last 12 mos." I like this idea! I would suggest clearly defining the formula and breaking this out between Medicare, Medicaid and Commercial payers.
Hrant Kouyoumdjian
This is Deja vu indeed! Back in 1984, as a newly minted health economist, my first foray into public policy was making a case for more info on hospital pricing as one strategy for instilling more competition. Then Assembly Health Committee Chair Curtis Tucker introduced a bill within a month of floating the idea with chief consultant Paul Press. The bill required hospitals to post in publicly accessible areas their “charges” for common procedures. We now refer to such policy as advocating transparency in pricing. It drew immediate/predictable opposition from the hospital industry; this was leverage Tucker wanted to horse-trade for another policy/bill. Fast forward some 20 years; we are still trying to make sense of arcane hospital accounting systems based on charges that have no relevance to real market dynamics. Perhaps a truer pricing disclosure would be posting what hospitals receive in actual “average” reimbursement for most common procedures from all payers for the last 12 mos.
Hatti Hamlin
The system is stacked against transparency. If you are involved in a fender-bender paramedics at the scene will urge you to go to the E.D. even if you feel fine. But ask what it will cost and they shrug. The cost could be as much as $15,000--merely to tell you what you think you already know--you're fine! But because you're insured, you shouldn't care it costs, right? In reality, you have no way of making a sensible choice and thus, you are part of the problem of persistent high costs. It's ridiculous that we can't know in advance what a hip replacement or other joint repair will cost. It's ridiculous that physicians write prescriptions for drugs that cost $400, when there's a slightly less potent over-the-counter drug for $25 that would do the trick. And if we don't fix it, we're going to bankrupt our children.

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