July 23rd Chat – Healthcare Price Transparency

Cost of Care

Colin Hung

Since the dawn of shopping (okay maybe a slight exaggeration), consumers have compared prices. Whether it was for papyrus, chickens, cars or flat screens, we have always sought the best price. Yet when it comes to healthcare we, as consumers, rarely think of the true cost of the procedures and the prescriptions given to us. This is true in Canada, the US, Australia, UK and in most other countries around the world. Healthcare pricing is a bit of a mystery.

It’s no wonder that the concept of healthcare price transparency has been gaining momentum over the past several years with patients, politicians, payers and surprisingly some providers. This year, advocates of price transparency got a huge boost when Time Magazine published a scathing expose of healthcare costs: “Bitter Pill: Why Medical Bills Are Killing Us” (note: subscription required). The comments on this article are very enlightening as well (no subscription required).

Leonard Kish, a #HCLDR community contributor and health information guru, wrote an outstanding blog post in the wake of the Time Magazine article called: “Lighting the Dark Corners of Healthcare Information“. In his post, Kish makes an insightful comment:

In an era of ever-more high deductible care, how much can providers continue to obscure pricing? People are going to want to know. The lack of transparency seems unsustainable, and forcing price transparency seems like a great place to start.

Proponents of healthcare price transparency argue that true reductions in healthcare costs cannot happen until patients and providers have full insight into how much procedures and prescriptions really cost. For example, the Washington Post published an article in 2012 “How Much Does an Appendectomy Cost?” that showed that getting your appendix out can cost anywhere between $2,000 and $186,000 depending on where you have the procedure done. The New York Times also published a similar article “The $2.7 Trillion Medical Bill” earlier this year that shed light on the costs of various procedures in the US vs other countries around the world. Below is a table from that article:

NY Times - The $2.7 Trillion Dollar Medical Bill

It’s intriguing to think about a time in the future where all healthcare prices are publically available. The optimists (read: proponents of price transparency) believe that two things will happen: (a) Pricing between providers will equalize into a narrow band with efficient/cost effective providers “winning” and (b) Patients will make better/more informed decisions about where they receive their care. Pessimists (read: detractors) believe that the placebo effect (where a consumer believes paying more = better quality) will occur and healthcare costs will in fact rise.

To learn more about the challenges of price transparency, I suggest reading this article, “Will Healthcare Price Transparency Help Reduce Costs?” from Peter Ubel, MD on KevinMD.com. In it, Ubel goes into much more detail about how pricing in healthcare isn’t the same as pricing consumer products like books or DVDs.

Dan Munro, #HCLDR community contributor and regular writer for Forbes Magazine, has an excellent article about pricing transparency, “Healthcare Pricing Transparency Gains Momentum“. In it he states:

Someday I think we’ll look back on this point in time and recognize it for the real milestone it represents… Not because it highlights the insanity and dysfunction of our current system (which it does), but because it’s an integral part of the most critical component of any and all patient-provider communication. Trust.

I agree with both Kish, Ubel and Munro. I believe that pricing transparency is a great place to start. I believe that it is not going to be easy to implement and will have unintended consequences. I believe that despite those challenges, pricing transparency is a great way to increase trust between providers and patients and it is only with trust that we will make meaningful improvement in the healthcare systems of any country.

This week #HCLDR will delve into the concept of pricing transparency.

  • T1: If you knew the true cost of a procedure/prescription would it change your behavior? If so, how? If not, why?
  • T2: If healthcare prices were published state-wide/country-wide what do you think would be the effect? Prices down?
  • T3: Other than price/cost what other information would you want publically disclosed to make better healthcare decisions?

Join us Tuesday July 23rd at 8:30pm Eastern Time (North America) for our weekly Tweetchat. 

Colin

Sources
Healthcare Pricing Transparency Gains Momentum – Forbes (http://www.forbes.com/sites/danmunro/2013/06/09/healthcare-pricing-transparency-gains-momentum/)

Will Healthcare Price Transparency Help Reduce Costs? – KevinMD.com
(http://www.kevinmd.com/blog/2013/06/health-care-price-transparency-reduce-costs.html)

Lighting the Dark Corners of Healthcare Information – HL7 Standards (http://www.hl7standards.com/blog/2013/02/26/lighting-dark-corners/)

Bitter Pill: Why Medical Bills Are Killing Us – Time Magazine (http://www.time.com/time/magazine/article/0,9171,2136864,00.html

How Much Does an Appendectomy Cost? – The Washington Post
(http://www.washingtonpost.com/blogs/wonkblog/post/how-much-does-an-appendectomy-cost-somewhere-between-1529-and-186955/2012/04/24/gIQAMeKMeT_blog.html)

The $2.7 Trillion Medical Bill – The New York Times (http://www.nytimes.com/2013/06/02/health/colonoscopies-explain-why-us-leads-the-world-in-health-expenditures.html?pagewanted=all&_r=3&)

Florida Hospital Takes a Step Toward Price Transparency – Time Swampland
(http://swampland.time.com/2013/06/03/florida-hospital-takes-a-step-toward-price-transparency/)

Healthcare Transparency Gains Ground as Lead Healthcare Issue – Healthcare Finance News
(http://www.healthcarefinancenews.com/blog/price-transparency-gains-ground-lead-healthcare-issue)

PokitDok Gets $4M to Improve Healthcare Cost Transparency – Venturebeat (http://venturebeat.com/2013/06/27/pokitdok-gets-4m-to-improve-health-care-cost-transparency/)

Healthcare Price Transparency Should Receive Bipartisan Support – KevinMD.com (http://www.kevinmd.com/blog/2013/07/health-care-price-transparency-receive-bipartisan-support.html)

Increased Price Transparency in Healthcare – Challenges and Potential Effects – New England Journal of Medicine (http://www.nejm.org/doi/full/10.1056/NEJMp1100041)

Price Transparency Could Lower Costs in ED – FierceHealthcare (http://www.fiercehealthcare.com/story/emergency-department-price-transparency-could-lower-costs-study-suggests/2013-02-28)

Healthcare Cost Transparency – Let the Revolution Begin – Jennifer Dennard (http://www.emrandehr.com/2013/07/12/healthcare-cost-transparency-let-the-revolution-begin/)

Image Credit

http://www.costsofcare.org/wp-content/uploads/2011/03/HiRes1-960×332.jpg

One comment

  1. The funny thing about price transparency is that Medicare pricing represents a decent estimate of the cost of any procedure plus a small markup. Those Medicare pricing data have been around for decades, and yet they are rarely publicized. The AMA has a price lookup tool, but consumers have to be savvy enough to understand CPT codes to use them. I looked at a few of the “transparency” sites on my blog, and only 1-2 of the 10 I reviewed were truly helpful. It seems like the bar is still low! Even an easier-to-use Medicare code pricer would probably get the job done!

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