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Health Care Price Transparency, We Need It Now!


Can you imagine shopping for food, clothing, home furnishings, automobiles, electronics, insurance policies, and other big-ticket items without knowing the cost you are going to incur? That is exactly what happens in health care. The lack of price transparency in health care and the fact that health care institutions have notoriously charged pretty much what they want for identical medical procedures in similar geographic markets (sometimes as much as a three-to-six fold difference) is common practice. Health care consumers have rarely stopped to consider how outrageous this is.


In my last blog post I talked about how to choose the right doctor. One of the critical factors in making these choices, particularly when choosing specialists or hospitals, is to look at charges for certain procedures, and determine whether the charges and quality of care of a specific physician or institution meet your expectations and your budget.Unfortunately, this information is not readily available which makes it difficult to intelligently determine who to use and what approach would provide the best care at the most cost-effective price.


The Commonwealth of Massachusetts passed legislation in 2012, Chapter 224 of the Acts of 2012 which attempts to contain rising healthcare expenditures and provide more transparency in health care costs. The law outlines  new requirements and responsibilities for providers, payers and state agencies,  including a mandate that all MA health plans are required to set up a website and a toll-free number where consumers can access provider-specific estimates of costs for procedures or admission to the hospital. This is a good start for the residents of MA and provides a model for the rest of the country.  But it is only a start.


Part of the problem with price transparency is that consumers need to know not only the “retail”price for a specific service: e.g. a CT scan, MRI, x-Ray or cardiac catheterization or stent, but also what the institution will charge for performing these tests and what portion of the cost health insurance will cover.  This is not readily available information.


Even when you have price information, there is no correlation to quality of care. You can generally assume that the institution, clinic or group charging the lowest price is not providing highest quality of care. The MA regulation coupled price with quality information from healthcare agencies, enabling consumers to figure out where they might find a high value provider. But typically this information is very hard to find. Although Medicare has a website which compares hospitals across the country and rates them on several quality criteria, pricing data is not yet included in the information they have released.


As health care consumers we have always accepted the treatments our doctors suggest rather than insisting on shared, collaborative decision-making. Although we talk a lot about the high  cost of our health care we are not behaving as intelligent consumers. We accept the cost of care as a given without ever thinking about shopping around as we would for items that are much less important to our well-being. It is time that we start scrutinizing the cost and the quality of our health care. If we make enough noise about this collectively,perhaps our voices will be heard and the pressure we exert in the aggregate could have an impact.




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