A few weeks ago, the Center for Medicare and Medicaid Services (CMS) passed a ruling demanding that healthcare institutions post the fees that they charge for various services on their websites.

“It’s about time!” was the general reaction.  In what other industry in the world do you obtain services and have no clue how much things are going to cost?

Unfortunately, as many have pointed out already, the new law will probably not do much to foster transparency. 

For one thing, the prices posted by hospitals are the “list prices” for various services.  List prices are prices that have nothing to do with reality.  They are highly inflated and unrealistic numbers that hospitals and medical groups use to start a price negotiation with health insurance plans.

The price game

For example, a hospital may list the price for a CT scan at $3,000, but will negotiate the price down by 80% or more with various health plans.  When insurance plans negotiate a “contracted price” with a hospital or a medical group, they can boast to the employers that they’ve negotiated an “80% discount!” but the whole thing is artificial since the list price is completely disconnected from reality.  A great book that explains all this is Catastrophic Care: How American Health Care Killed My Father and How We Can Fix It, by David Goldhill.

Unfortunately, the list price is often what uninsured patients get charged!  If you happen to need a test or a service from a hospital and are uninsured, chances are you will receive a bill that drawn from the crazy high list.   The list price may also be what hospitals charge people who happen to carry an insurance plan that is not “in network” with the hospital (read for example, the story concerning the Zuckerberg San Francisco General Hospital’s practice of not contracting with any health insurance plan for emergency services and then serving patients with huge “surprise bills”).

The other problem with the mandate to post prices is that the lists that hospitals post are often incomprehensible. 

A local example

For example, if you download the price list that the UCSF Medical Center has put on its website, you get a random listing of supplies and procedures that doesn’t tell you the first thing about what the prices are for.  It does not include standard CPT codes or much by the way of useful or specific information about what the prices are.

If a procedure is listed, it’s completely unclear if the charge includes all the services (including supplies, anesthesia, doctor fees) or only a portion.   Here’s an example from the UCSF hospital website, accessed on March 7, 2019: 

 

UCSF list prices for orthopedic procedures

What does it mean that “Insert and Remove Bone Pin” will cost $1,389?  Does that include the whole procedure?  And is it the same price if the pin is in a simple bone, like the tibia, or a complex bone like the wrist?

Further down in the same list (which contains 90,000 entries!) I looked for cardiac procedures, since I am most familiar with those.  Even there I couldn’t make heads or tails of what was listed. 

 

UCSF list prices for echocardiograms

There were 3 listings under “TTE F/U or LTD (which means a limited cardiac ultrasound) with prices varying from $621 to $1158 and 2 listings under “TTE W/Doppler COMPLETE” (which means a full cardiac ultrasound) with prices varying from $1467 to $5197!  How is that supposed to help?  (And what outrageous prices!  We charge $550 for a complete cardiac ultrasound with Doppler)

A matter of trust

As far as I’m concerned, the main issue with all this is that it greatly undermines confidence.  Honesty cannot be compartmentalized.  If health care institutions and healthcare providers are going to be entrusted with the care of patients, they have to demonstrate that they are worthy of the trust every step of the way.  Price obscurity sends a very bad signal to patients.

Of course, I know that most hospital administrators and most doctors who work in those big institutions are trying to do the best they can.  The problem is not entirely in their control and has more to do with the way the healthcare system operates as a whole. 

But that’s one of the main reason why many doctors are saying “no” to that system and opting out of it to offer what services they can to whomever needs them in an honest and truly transparent way.  The pioneering Surgery Center of Oklahoma was one of the first surgical institutions to do this, and many are copying its model throughout the country.  True price transparency is an essential feature of the direct patient care movement.  We feel we owe it to our patients and we are truly committed to it.

Not convinced? Check out our services page and see for yourself!

–Dr. Accad