Even experts can’t find the price of a medical procedure

health care prices | Truth in Heath CareIf a doctor and a health care reporter can’t find the price of a medical procedure in advance, what hope do the rest of us have?

That’s the sad question I was left with after reading here and here about the experiences of two folks ideally suited to comparison shop for a scheduled medical treatment. Both found the effort a near impossible ordeal.

Two attempts, two failures

The doctor, trying to mitigate the effects of a high-deductible family plan, was searching for the cost of eyelid surgery for his daughter—a minor procedure and not urgent. Here’s what he found:

  • an insurer’s online tool that was difficult to find, difficult to use and didn’t include his daughter’s particular surgery
  • a response from the insurer to a written request, which arrived 24 days later with the price for the ophthalmologist only—not the anesthesiologist, the facility or any other accompanying cost
  • alternative opthalmologists who would provide a price only after evaluating the daughter at $240 each.

One month into the price search, the family gave up, scheduled the surgery and crossed their fingers they could afford the bill.

The health care reporter’s experience was equally opaque. She was investigating whether childbirth was more expensive in Northern California than elsewhere, a tip she had received from an obstetrician. What she learned is that:

the vast majority of contracts between doctors or hospitals and insurance companies are subject to a gag clause, which prohibits either party from disclosing negotiated rates. That means it’s almost impossible for consumers, researchers or journalists to find actual, accurate numbers, despite the act that cost differentials among doctors can be so stark.

What to do?

The staggering costs of the U.S. health care system will never be controlled without major improvements in price transparency. Unless we know the price of a product or service before we buy, providers can charge whatever they want.

What to do? The doctor above, Ateev Mehrotra, an associate professor of health care policy and medicine at Harvard Medical School, has some thoughtful suggestions:

  • Bundled payments—patients want to know the total cost of a medical treatment. They want a single payment that covers everything related to the episode of care. Bundled payments exist today. They should be used for everything.
  • Cost estimates at the time a procedure is recommended. A patient should walk out of the office with an estimate after the initial visit.
  • Major improvements in access to price data. New Hampshire and Colorado have good online sites. Mimic them.
  • More extensive profiles of primary care doctors that include the specialists and facilities they typically recommend, including the average prices of those referrals. That way, patients can shop for a primary care doctor and then follow the doctor’s advice without later shopping for every single service.

The latter might be a tall order, but it is certainly technologically possible. It won’t happen, though, without patients howling. When it comes to information about costs, it is not financially beneficial for most providers to share.

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