Obstacles to price transparency remain legion, and probably never will go away completely, says Rebecca Palm, co-founder of CoPatient.com, a Portland, Ore.-based billing resolution company that offers free medical bill analysis. She likens it to the U.S. Tax Code. “If you want to look up the tax rate for your income bracket, it’s pretty straight-forward,” she says. “But there are thousands of pages of fine print that can influence how your tax rate gets applied — if you have a house, kids, and 30,000 other factors. It’s that behind-the-scenes complexity and not just that list price that contributes to the problem.”
Palm says the reasoning behind rising deductibles is to make patients have some skin in the game. “The question is still out, ‘What tools do they have to actually become better consumers?’ That is something we need to think about and focus on.”
Employers are perhaps the biggest driving force behind transparency, and insurers are taking notice. According to a 2012 survey by consulting firm Towers Watson and the National Business Group on Health, 15 percent of employers require their health plans to include price information. Another 22 percent plan to do so next year.
Aetna’s price estimator tool allows members to see the fees it negotiated with each doctor in its networks: Doctor X’s negotiated rate is $750 per colonoscopy, Doctor Y’s rate is $900. Cambia Health is doing the same thing in the Pacific Northwest.
A few states have even taken steps to help consumers get pricing on some procedures. Maine requires insurance companies to share payment data, which it compiles and publishes online. The information can be narrowed by ZIP code and hospital. However, the site is limited to about 30 procedures. The program is modeled after one in New Hampshire, one of five state efforts singled out in a 2011 Government Accountability Office report on the state of pricing transparency. The other states are California, Florida, Massachusetts and Wisconsin.
While many private and government entities are making strides in pricing transparency, it’s still an imperfect system, says Anthony Wright, executive director of the nonprofit Health Access California, which lobbies for transparency. “We haven’t fixed the core problem, which is that the prices in health care have no relation to either what the services cost to provide nor to what most people pay,” he says.
Chris Riedl, head of consumerism and product innovation at Aetna, says while the numbers of patients price shopping are still small, they are growing quickly, especially for services like CT scans, colonoscopies and MRIs “where quality is relatively comparable across the different provider types.”
After surprise health care prices for his own family, Dr. Jeff Rice founded Healthcare Blue Book, a national online tool to help consumers find fair prices for health care.(Photo by John Walker)
For many other health care services, cost is one of several factors they consider. “Convenience, location, friendliness of the office staff, these certainly are heavy influencers,” she says. “Health care decisions are very personal.”
This year, Jeff Rice celebrates the fifth anniversary of Healthcare Blue Book, the web-based tool helping consumers find local or national fair prices for health care. He founded the company after being charged $200 for a simple cholesterol test that should have cost about $20. “As a physician and managed care executive knowledgable about the system, I still got completely taken advantage of,” he says. “I thought, ‘If I just told patients what I knew about health care, they could save a lot of money.’” To help patients negotiate costs, Healthcare Blue Book analyzes insurance payments to doctors and considers the average of payments for a procedure the “fair price.”
Rice says that getting costs from a health care provider continues to require persistence, however. Two years ago, his son, Jack, needed foot surgery. He knew the surgeon he wanted to use and called the hospital to get an estimated cost. “Once they figured out what my health insurance was and my network, they said it might be between $15,000 and $25,000,” Rice says. He followed up with the surgeon to see if he could do the surgery at another facility outside the hospital, and the doctor said yes. “I called them, and they named the exact price: $1,550."
— with additional reporting by Gretchen Becker and Michael Schroeder