Q: Isn’t this information already available?
Not exactly. In January, new rules took effect under the Affordable Care Act that require hospitals to post online their “list prices,” which hospitals set themselves and have little relation to actual costs or what insurers actually pay.
What resulted are oftenthat contain thousands of a la carte charges – ranging from the price of medicines and sutures to room costs, among other things – that patients have to piece together if they can to estimate their total bill. Also, those list charges don’t reflect the discounted rates insurers have negotiated, so they are of little use to insured patients who might want to compare prices hospital to hospital.
The information that would result from President Trump’s executive order would provide more detail based on negotiated, discounted rates.
A senior administration official at the press briefing said details about whether the rates would be aggregated or relate to individual hospitals would be spelled out only when the administration puts forward proposed rules to implement the order later this year. It also is unclear how the administration would enforce the rules.
Another limitation: The order applies only to hospitals and the medical staff they employ. Many hospitals, however, are staffed by doctors who are not directly employed, or laboratories that are also separate. That means negotiated prices for services provided by such laboratories or physicians would not have to be disclosed.
Q: How could consumers use this information?
In theory, consumers could get information allowing them to compare prices for, say, a hip replacement or knee surgery in advance.
But that could prove difficult if the rates were not fairly hospital specific, or if they were not lumped in with all the care needed for a specific procedure or surgery.
“They could take the top 20 common procedures the hospital does, for example, and put negotiated prices on them,” said Mr. Nation. “It makes sense to do an average for that particular hospital, so I can see how much it’s going to cost to have my knee replaced at St. Joe’s versus St. Anne’s.”
Having advance notice of out-of-pocket costs could also help patients who have high-deductible plans.
“Patients are increasingly subject to insurance deductibles and other forms of substantial cost sharing. For a subset of so-called shoppable services, patients would benefit from price estimates in advance that allow them to compare options and plan financially for their care,” said John Rother, president and CEO at the advocacy group National Coalition on Health Care.
Q: Will this push consumers to shop for health care?
The short answer is. Right now, it’s difficult, even with some of the tools available, said Lovisa Gustafsson, assistant vice president at the Commonwealth Fund, which has looked at whether patients use existing tools or the list price information hospitals must post online.
“The evidence to date shows patients aren’t necessarily the best shoppers, but we haven’t given them the best tools to be shoppers,” she said.
Posting negotiated rates might be a step forward, she said, but only if it is easily understandable.
It’s possible that insurers, physician offices, consumer groups, or online businesses may find ways to help direct patients to the most cost-effective locations for surgeries, tests or other procedures based on the information.
“Institutions like Consumer Reports or Consumer Checkbook could do some kind of high-level comparison between facilities or doctors, giving some general information that might be useful for consumers,” said Tim Jost, a professor emeritus at the Washington and Lee University School of Law in Lexington, Va.
But some hospitals and insurers maintain that disclosing specific rates could backfire.
Hospitals charging lower rates, for example, might raise them if they see competitors are getting higher reimbursement from insurers, they say. Insurers say they might be hampered in their ability to negotiate if rivals all know what they each pay.
“We also agree that patients should have accurate, real-time information about costs so they can make the best, most informed decisions about their care,” said a statement from lobbying group America’s Health Insurance Plans. “But publicly disclosing competitively negotiated, proprietary rates will reduce competition and push prices higher – not lower – for consumers, patients, and taxpayers.”
Kaiser Health News is a nonprofit national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation that is not affiliated with Kaiser Permanente.