Hospitals Post Prices For First Time, But Patients Are Unlikely To Find Clarity
For the first time ever, many Oklahoma hospitals are posting their prices online for every service or item they offer, creating a consumer menu.
But a closer look at these price lists shows that they are unlikely to help patients comparison-shop with ease or figure out complicated medical bills.
A check of websites for some of the largest hospital systems in Oklahoma City and Tulsa showed the price lists are hard to find and are usually in the form of a link to a large downloadable spreadsheet file.
The itemized information in the files, listing procedures, drugs and supplies, ranges from clear-cut to nearly indecipherable, at least for ordinary patients. Moreover, many listed charges for procedures, such as an organ transplant or emergency care, don’t represent the entire potential cost to patients, because they don’t include charges from physicians who are not hospital employees.
The price lists stem from a federal regulation that went into effect on Jan. 1 requiring hospitals to post standard charges for drugs, supplies and services. However, the list, typically called a chargemaster, is rarely the amount charged to patients with private insurance or in a government insurance program like Medicare or Medicaid. Patients without insurance rarely pay the listed price either because of hospital discounts or write-offs for uncompensated care.
Some hospitals and trade associations fought the rule when it was proposed last summer, saying the price lists wouldn’t help patients find out prices for personalized care and could add confusion to the billing process. But federal regulators at the U.S. Department of Health and Human Services said it would be a good first step toward greater price transparency – a problem that health experts say restricts competition, drives up costs and subjects patients to sticker shock.
The government wants hospitals to provide the information in a computer-friendly format for further analysis; thus the downloadable data files.
“We are concerned that challenges continue to exist for patients due to insufficient price transparency,” the department said in explaining the rule. “Such challenges include patients being surprised by out-of-network bills for physicians, such as anesthesiologists and radiologists, who provide services at in-network hospitals, and patients being surprised by facility fees and physician fees for emergency department visits.”
What Hospitals Reported
Oklahoma Watch reviewed the price lists for the University of Oklahoma Medical Center, Integris Baptist Medical Center, Mercy Hospital and St. Anthony Medical Center, all in Oklahoma City; and St. John Medical Center and Saint Francis Hospital in Tulsa.
The information in the files ranges from clear-cut to nearly indecipherable, at least for ordinary patients. At Integris Baptist Medical Center, “intraocular procedures” such as cataract surgery were the least expensive, with an average charge of $3,452. Topping the list was “ECMO OR TRACH W MV >96 HRS OR PDX EXC FACE, MOUTH & NECK W MAJ O.R.” Translated: Placing a patient on a machine that pumps and oxygenates their blood (for more than four days) or performing a tracheostomy to open the patient’s neck so he or she can breathe, and then performing a major operation. The average charge for extracorporeal membrane oxygenation (ECMO) was $873,926. At Mercy, the highest charge was for extremely premature babies who needed help breathing. Charges for “EXTREME IMMATURITY OR RESPIRATORY DISTRESS SYNDROME, NEONATE” averaged $269,700.
Some entries were clear-cut. At St. Anthony, the average charge for a simple vaginal birth was $15,182.
Not What Patients Pay
The Oklahoma Hospital Association said it has fielded questions from hospitals about the wisdom of posting price lists. In the past, hospitals have declined to provide the information, saying they were trade secrets or could harm competition.
“These amounts have little to no relation to the patient’s out-of-pocket expense,” said Rick Snyder, the association’s vice president of finance and information systems. “The best source for out-of-pocket estimates for insured people is their insurance plan, which has information on contracted provider rates, and the individual’s deductible and coinsurance information. Uninsured people should ask the hospital or other provider for an estimate, and these may include charity, sliding scale or other discounts for the uninsured.”
Snyder said government programs like Medicare and especially Medicaid don’t pay enough to cover hospital costs, so costs are shifted to commercial plans that pay a larger percentage of hospital charges. That also happens when hospitals have to cover the costs of uncompensated care.
Hospitals say they offer other information of greater use to patients, including estimates of actual out-of-pocket expenses when patients schedule or register for procedures.
Integris provides several price lists, including ones for supplies, pharmaceuticals, and tests and diagnostic procedures such as MRIs.
“It is important to remember that health care pricing published on our website is not the amount a patient pays – it is the price before insurance or other third-party payer amounts/negotiated discounts are applied,” Integris spokeswoman Brooke Cayot said in an email. “We always recommend that our patients reach out to their insurer or to Integris Financial Services for information whenever possible as they plan for expenses.”
Mercy’s price list has standard prices for 50 of the most-used inpatient services, as well as high-volume outpatient tests and treatments.
“Charges billed are based on actual care provided and will vary from patient to patient, depending upon differences in treatment plans, complications, services ordered by physicians and the individual patient’s health,” Mercy spokeswoman Devyn Smith said in an email.
Jonathan Small, president of the Oklahoma Council of Public Affairs, an advocacy group, said health-care pricing is opaque for consumers, whom he said are taken advantage of by both insurers and hospitals. Patients with private insurance are often told their insurance negotiated steep discounts from a price that wasn’t reflective of actual costs, he said.
“This posting of the master pricing list could reveal how ridiculous it is,” Small said. “It’s not going to provide anybody any information on a large scale, but it could expose how idiotic and insane health-care pricing has become. It allows hospitals to say they have a certain amount of uncompensated care and for insurance companies to tell policyholders and employers about the discounts they were able to get customers.”
The Surgery Center of Oklahoma has been a national leader in price transparency and offers fixed, all-inclusive prices for surgeries when customers pay up front. The center does not accept insurance, but it does take patients whose employers have self-funded health plans.
Dr. Keith Smith, the center’s co-founder and a frequent critic of hospital pricing, said posting hospital price lists is unlikely to help consumers. But it may put down a marker for future price transparency reforms.
“The pricing they list is indecipherable by the consumer, but this rule may bring to people’s attention the need for true price transparency,” Smith said. “If I were a big, price-gouging hospital, I would really be worried by this rule, not by what it’s requiring them to release, but what it signals going forward – maybe post prices like we have.”
Smith, who prefers to let the market figure out health care costs and is averse to additional government regulations, said he hopes hospitals won’t claim to be “price transparent” just because they posted the master price list.
“I’ve always worried if the federal government got involved in the price transparency movement, they would redefine price transparency to actually suit the price gougers who want no part of price transparency,” Smith said. “I’m opposed to federal mandates as a rule, but I think the market for true price transparency is growing.”
Smith said when he first started offering cash prices, he went to fellow doctors and surgeons and asked them how much they thought they should be paid for particular procedures, not what Medicare or Medicaid or private insurance was paying them. Knowing how long typical surgeries last and the cost of supplies then allowed him to build the price list, which the Surgery Center put online a decade ago. The prices have been adjusted four times since then, with prices lower each time.
“It’s kind of like a building contractor; it’s time and materials,” Smith said. “The hospitals know all of this stuff. It’s not algebra. It’s simple math at that point.”
Where to Find Price Lists
Integris hospitals, Oklahoma City, other locations
Mercy health system, Oklahoma City area
OU Medicine, Oklahoma City
SSM Health (St. Anthony), Oklahoma City, other locations
St. Francis Health System, Tulsa, other locations
Hillcrest Medical Center, Tulsa
St. John Health System, Tulsa
Oklahoma State University Medical Center, Tulsa