American Hospitals now Required to List Their Medical Prices Online

Hospitals in America are now required to post their list prices online as of January 1st, 2019. These detailed lists are known as chargemasters and include thousands of entries. These new government orders include making their “list price” for services, such as MRI or blood tests, available to the public by posting them online.

The 2010 Affordable Care Act required these lists to be made available to the public, however, they were not required to publish them, until now. This new requirement makes an effort to improve price transparency which is often lacking in the healthcare industry.  

Health care experts stress that consumers should not consider these chargemasters to be realistic price guides as services and medications vary from person to person.

HealthCare Weekly Insight

As part of this new federal law, hospitals are now required to publish price lists that were once secret. These price lists are not meant to be taken seriously, according to health care experts since they are not realistic in terms of price guides.

Even though this information is welcome for patients, the new data falls short on providing usable insights to most consumers. Individuals go through different procedures and tests, and are given different medications based on their diagnoses–which can differ from person to person.

Prices may be hard to Decipher

The chargemasters displayed this week are a collection of concise but detailed information set by each hospital for every type of service the patient may encounter. For instance, a trip to the emergency room is accompanied by several different tests. So in order to find out what a trip to the emergency room might cost, you have to put together all the prices for each component of their visit (the blood tests, medications that were dispensed, physician’s cost and much more).

As mentioned in the CNN health article, Gerard Anderson, Director of the Johns Hopkins Center for Hospital Finance and Management states, “I don’t think it’s very helpful… There are about 30,000 different items on a chargemaster file. As a patient, you don’t know which ones you will use”.

These prices are typical starting points between hospitals and insurance companies for negotiating purposes, and are often unrelated to the price most patients are actually required to pay. For patients who have health plans, the price of services is determined by negotiations between the insurance company and the hospital. Therefore, if patients want to know accurate pricing information, it can be most beneficial to check with their insurance companies.

The data that is posted for the thousands of procedures is often incomprehensible for patients. It also may not be presented the same way by different hospitals so it becomes hard to compare prices for similar services.

“If a patient goes online and sees a (chargemaster) price that they can’t afford, I’m concerned that some consumers might forego needed care, especially if that price is the total cost of service and not what the consumer is expected to pay based on what their insurance plan covers or not,” stated Mark Fendrick, a University of Michigan professor.

Healthcare in the United States

Health care in U.S. is expensive; $3.2 trillion dollars a year are spent on healthcare. There is more money spent on healthcare in the U.S. than in any other country in the world. Several factors play a role when it comes to improving healthcare as a whole, such as price hikes in drug development and discovery, administrative costs for billing procedures, and money that is spent on healthcare practitioners.

The procedures and treatments that patients go through are often unknowable and only comprise one part of the bill. Comparisons between hospitals for the same type of health care and services provided can be difficult to distinguish.

“This policy is a tiny step forward, but falls far short of what’s needed,” stated the founder and Chief Executive of Clear Health Costs (consumer health research organization), Jeanne Pinder. She continued by stating, “The posted prices are fanciful, inflated, difficult to decode and inconsistent, so it’s hard to see how an average person would find them useful.”

Costs can be transparent

Many hospitals can have difficulties being transparent with their medical costs, making it difficult for patients to estimate out-of-pocket costs for a procedure. With this new government order, hospitals might start taking the initiative to be transparent about their costs to their patients.

The price list rates are usually different from the negotiated rates that insurance companies pay, but are a good starting point for patients without insurance or patients who are treated at hospitals outside of their insurance company’s network.

The chargemaster price is usually the starting point for pricing as the price range differs from hospital to hospital, and within the negotiations made by the hospitals and insurance companies. It is unclear whether these lists will have much impact.