Long hidden, such price variations are supposed to be available in stark black and white under a Trump administration price transparency rule that took effect at the start of this year. It requires hospitals to post a range of actual prices—everything from the rates they offer cash-paying customers to costs negotiated with insurers.
Many have complied.
But some hospitals bury the data deep on their websites or haven’t included all the categories of prices required, according to industry analysts. A sizable minority of hospitals haven’t disclosed the information at all.
While imperfect and potentially of limited use right now to the average consumer, this trove is, nonetheless, eye-opening as an illustration of the huge differences in prices—nationally, regionally, and within the same hospital. It’s challenging for consumers and employers to use, giving a boost to a cottage industry that analyzes the data, which in turn could be weaponized for use in negotiations among hospitals, employers, and insurers. Ultimately, the unanswered question is whether price transparency will lead to overall lower prices.
In theory, releasing prices may prompt consumers to shop around, weighing cost and quality. Perhaps they could save a few hundred dollars by getting their surgery or imaging test across town instead of at the nearby clinic or hospital. But, typically, consumers don’t comparison-shop, preferring to choose convenience or the provider their doctor recommends. A recent Peterson-KFF Health System Tracker brief, for instance, found that 85 percent of adults said they hadn’t researched the price of hospital treatment.
And hospitals say the transparency push alone won’t help consumers much, because each patient is different—and individual deductibles and insurance plans complicate matters.
Under the Trump-era rule, hospitals must post what they accept from all insurers for thousands of line items, including each drug, procedure, and treatment they provide. In addition, hospitals must present this in a format easily readable by computers and include a consumer-friendly separate listing of 300 “shoppable” services, bundling the full price a hospital accepts for a given treatment, such as having a baby or getting a hip replacement.
The negotiated rates now being posted publicly often show an individual hospital accepting a wide range of prices for the same service, depending on the insurer, often based on how much negotiating power each has in a market.
In some cases, the cash-only price is less than what insurers pay. And prices may vary widely within the same city or region.
In Virginia, for example, the average price of a diagnostic colonoscopy is $2,763, but the range across the state is from $208 to $10,563, according to a database aggregated by San Diego-based Turquoise Health, one of the new firms looking to market the data to businesses while offering some information free of charge to patients. Another is Health Cost Labs, which will have pricing information for 2,300 hospitals in its database when it goes live this month.
Patients can try to find the price information themselves by searching hospital websites, but even locating the correct tab on a hospital’s website is tricky.
Here’s one tip: “You can Google the hospital name and the words ‘price transparency’ and see where that takes you,” said Caitlin Sheetz, director and head of analytics at the consulting firm ADVI Health in the Washington, D.C., area.
Typing in “MedStar Health hospital transparency,” for example, likely points to MedStar Washington Hospital Center’s “price transparency disclosure” page, with a link to its full list of prices, as well as its separate list of 300 shoppable services.
By clicking on the list of shoppable services, consumers can download an Excel file. Searching it for “colonoscopy” pulls up several variations of the procedure, along with prices for different insurers, such as Aetna and Cigna, but a “not available” designation for the cash-only price. The file explains that MedStar doesn’t have a standard cash price but makes determinations case by case.
Performing the same Google search for the nearby Inova health system results in less useful information.
Inova’s website links to a long list of thousands of charges, which aren’t the discounts negotiated by insurers, and the list isn’t easily searchable. The website advises those who aren’t Inova patients or who would like to create their own estimate to log into the hospitals’ “My Chart” system, but a search on that for “colonoscopy” failed to produce any data.
Because of the difficulty of navigating these websites—or locating the negotiated prices once there—some consumers may turn to sites like Turquoise. Doing a similar search on that site shows the prices of a colonoscopy at MedStar by insurer, but the process is still complicated. First, a consumer must select the “health system” button from the website’s menu of options, click on “surgical procedures,” then click again on “digestive” to get to it.
There is no similar information for Inova because the hospital system hasn’t yet made its data accessible in a computer-friendly format, said Chris Severn, CEO of Turquoise.
Inova spokesperson Tracy Connell said in a written statement that the health system will create personalized estimates for patients and is “currently working to post information on negotiated prices and discounts on services.”
For consumers who go the distance and can find price data from their hospitals, it may prove helpful in certain situations:
- Patients who are paying cash or who have unmet deductibles may want to compare prices among hospitals to see if driving farther could save them money.
- Uninsured patients could ask the hospital for the cash price or attempt to negotiate for the lowest amount the facility accepts from insurers.
- Insured patients who get a bill for out-of-network care may find the information helpful because it could empower them to negotiate a discount off the hospitals’ gross charges for that care.
While there’s no guarantee of success, “if you are uninsured or out of network, you could point to some of those prices and say, ‘That’s what I want,’” said Barak Richman, a contract law expert and professor of law at Duke University School of Law.
But the data may not help insured patients who notice their prices are higher than those negotiated by other insurers.
In those cases, legal experts said, the insured patients are unlikely to get a bill changed because they have a contract with that insurer, which has negotiated the price with their contracted hospitals.
“Legally, a contract is a contract,” said Mark Hall, a health law professor at Wake Forest University.
Richman agrees.
“You can’t say, ‘Well, you charged that person less,’” he noted, but neither can they say they’ll charge you more.
Getting the data, however, relies on the hospital having posted it.
As for compliance, “we’re seeing the range of the spectrum,” said Jeffrey Leibach, a partner at the consulting firm Guidehouse, which found earlier this year that about 60 percent of 1,000 hospitals surveyed had posted at least some data, but 30 percent had reported nothing at all.
Many in the hospital industry have long fought transparency efforts, even filing a lawsuit seeking to block the new rule. The suit was dismissed by a federal judge last year.
They argue the rule is unclear and overly burdensome. Additionally, hospitals haven’t wanted their prices exposed, knowing that competitors might then adjust theirs, or health plans could demand lower rates. Conversely, lower-cost hospitals might decide to raise prices to match competitors.
The rule stems from requirements in the Affordable Care Act. The Obama administration required hospitals to post their chargemaster rates, which are less useful because they are generally inflated, hospital-set amounts that are almost never what is actually paid.
Insurers and hospitals are also bracing for next year, when even more data is set to come online. Insurers will be required to post negotiated prices for medical care across a broader range of facilities, including clinics and doctors’ offices.
In May, the Centers for Medicare & Medicaid Services sent letters to some of the hospitals that haven’t complied, giving them 90 days to do so or potentially face penalties, including a $300-a-day fine.
“A lot of members say until hospitals are fully compliant, our ability to use the data is limited,” said Shawn Gremminger, director of health policy at the Purchaser Business Group on Health, a coalition of large employers.
His group and others have called for increasing the penalty for noncomplying hospitals from $300 a day to $300 a bed per day, so “the fine would be bigger as the hospital gets bigger,” Gremminger said. “That’s the kind of thing they take seriously.”
Already, though, employers or insurers are eyeing the hospital data as leverage in negotiations, said Severn. Conversely, some employers may use it to fire their insurers if the rates they’re paying are substantially more than those agreed to by other carriers.
“It will [anger] anyone who is overpaying for health care, which happens for various reasons,” he said.
Julie Appleby is a senior correspondent who reports on the health law’s implementation, health care treatments and costs, trends in health insurance, and policy affecting hospitals and other medical providers. This article was originally published on Kaiser Health News, which is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation, which is not affiliated with Kaiser Permanente.
