Wednesday, February 13, 2013

Price of Health Care a Mystery for Patients

You have a $5000 annual deductible and need a test or treatment.   It should be easy to find out upfront what it will cost, right?  Good luck with that one!

I've written before about the problems with health care price transparency and hidden costs but there hasn't seemed to be much improvement over the years.  A new study published in the Journal of the American Medical Association (JAMA) found that only 16% of hospitals surveyed were able to provide an estimate for the total cost of a hip replacement procedure.

The researchers surveyed 122 hospitals covering all 50 States and asked each hospital to estimate the cost of a hip replacement for a 62 year old, uninsured individual who would pay "out-of-pocket".   They found that:
  • Only nine of the 20 orthopedic hospitals and 10% of the other hospitals could provide a full cost estimate for hospital and physician fees after a minimum of five phone calls;
  • 12 of the orthopedic hospitals could provide a complete cost estimate after the researchers contacted the hospital and affiliated physicians separately; and
  • 54 of the remaining hospitals could provide a complete cost estimate after the hospitals and affiliated physicians were contacted separately.
  • Many of the people they asked at hospitals seemed perplexed with the question and many times researchers were told they needed to make an office visit just to get an estimate.
Now are you ready for this?  The cost estimates varied from $11,000 to more than $125,000.

It is unlikely that they were comparing apples to apples.  Some estimates failed to cover physician fees or all costs but still, the question was quite simple and direct.  They also found no correlation between high cost and top-ranked hospitals and there is no data that shows certain high cost hip implants were better than cheaper options.

There is no way consumers can be "market driven, cost conscious" if they can't get accurate pricing information. And there is really no justification for the price variance.  It can't be explained by quality outcomes or any other measure.

If you live in the USA, you cannot be an informed consumer of health care. 


Anonymous said...

This is so true. A few years ago I was sent for a shoulder MRI and phone call after phone call I could not, for the life of me, get anyone to give me a price for this procedure. I didn't get it done at all. I couldn't just go and have it and get billed for an anonymous amount, just couldn't do it.

My doctor did surgery anyway, without the MRI. I paid in full for the surgery up front. Months later she billed me for 8X the amount I already paid saying that I was under-billed by mistake. I never paid her. Ridiculous.

Anonymous said...

Right on with this post. I am one of those millions that has insurance but the first $5,000 a year is mine to pay. I don't want a battery of blood tests that cost $800 unless it is meaningful for my health. I find that doctors have no clue how much something will cost so when they check all the boxes on the lab slip, I want to know what it is and if it is needed.

Jelf Group said...

Thank you for laying out the data about the increasing rates of health care packages. Somehow, the facts you have here can provide clarification to the patients.

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Tom said...

This is really something!

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