Hospitals should now publish their costs on-line. How customers can profit from it
Cavan Images | Cavan | Getty Images
Perhaps you are familiar with a common feature of health insurance cover: You only know the cost of services after the fact.
A new price transparency rule that went into effect on January 1st is an attempt to change that.
Basically, hospitals must now publish the prices they have negotiated with insurers for 300 joint medical services online in a consumer-friendly format.
“That information was pretty obscure to the public,” said Nisha Kurani, senior policy analyst at the Kaiser Family Foundation.
However, the change is not without its challenges, including a lack of public awareness, Kurani said.
And what could be more useful to healthcare consumers – the amount they would pay out of pocket based on those prices – is a few years away. By then, a recently concluded rule that will come into effect in 2023 will require insurance companies to publish out-of-pocket their negotiated rates with providers as well as the patient’s estimated costs for a variety of services.
“It can be useful to see the tariffs negotiated by the payer, but in general patient sharing is more useful,” Kurani said.
Outside of Medicare and Medicaid, there is little or no price regulation in the private insurance market, including employer-sponsored plans and those available through the federal (or state) market. This means that the final cost to consumers for a given service can vary widely, even before considering things like deductibles and co-payments by insurers.
For example, the average cost negotiated by major employer plans with insurers for a lower back MRI in 2018 was $ 1,106 in the Houston area compared to $ 404 in Las Vegas, according to Kaiser and the Peterson Center on Healthcare .
In Baltimore – a state (Maryland) where regulators set the prices hospitals can charge for services – the average inpatient cost of a full knee or hip replacement is about $ 25,000. That’s the equivalent of more than $ 55,000 in the New York area. The national average is $ 35,300.
With the rule now in place, the idea is that consumers can shop for a service they need at the best price. Of course, in general, they would still have to find out what their stake would be.
Of the 300 services that must be included in the consumer-friendly information, 20 are commissioned by the Centers for Medicare & Medicaid Services. The remaining 230 can be determined by any hospital.
More from Personal Finance:
New Year, New You: How to Reset Your Finances
Covid makes it harder to get into a top college
Not all end-of-life decisions are made in a will
“The rule requires that service costs be pooled in a way that makes sense for those services. So consumers are not looking for the cost of a swab,” Kurani said.
Of course, many medical services in hospitals are unplanned. Also, even if you are planning a service or procedure in advance, you need to visit the website of each hospital that you want to compare. And it is generally up to each individual how exactly to display the information, provided that it is consumer friendly.
“There aren’t as many specs as needs to be presented,” said Kurani.
Still, she said, the pricing information could be useful if you want to look around. The challenge can be finding the information for a specific hospital.
Kurani visited more than 100 websites over the past year to compare the cost of Covid testing at different hospitals across the country.
“Some sites had the information upfront, others had it easily accessible under their billing and insurance pages, but others were harder to find and I had to dig for it,” she said.