Doctors and hospitals should give patients both their “retail” prices and the prices actually paid by health insurers.
Witnesses delivered that message Wednesday at a hearing on health price transparency organized by the health subcommittee at the U.S. House Energy and Commerce Committee.
Paul Ginsburg, president of the Center for Studying Health System Change, Washington, and other witnesses warned that simply publishing detailed rate bases, or even databases of the discounted rates actually paid by insured patients, probably will not be enough to encourage meaningful price-based competition.
In the laser eye surgery market, for example, competition appears to have reduced advertised rates to $300 per eye, but, in the real world, only 3% of the patients pay less than $1,000 per procedure, Ginsburg said, according to a written version of his remarks.
In other markets dominated by patients who pay for their own care, “we found little evidence of consumer price shopping,” Ginsburg said.
Consumers sometimes choose lower-priced plastic surgeons over more expensive surgeons, but they seem to be more interested in quality than cost, Ginsburg said.
But Dr. David MacDonald, a Charlottesville, Va., family physician, said he has seen many cases of hospitals asking uninsured patients to pay 4 times or even 9 times more for services than they would ask insured patients to pay.
At one California hospital, the total bill for a few tests would be $2,832 for an uninsured patient, but the federal TriCare insurance program for military families would pay just $229.62 for the same tests, MacDonald said.
Gerard Anderson, a public health professor at Johns Hopkins University, said the cost of U.S. physician visits is about 200% of what it is in developed countries and the cost of a day in the hospital is about 250% more, even though patients in other developed countries, such as Japan, have far more access to high-tech equipment, such as CT scanners.
To make meaningful price comparisons possible, U.S. health care providers must translate their billing codes into plain English, provide the prices actually paid by insurers (rather than the list prices), and, when possible, help patients who are not sure what services they will use by summarizing their rates, by saying how their rates compare to the standard Medicare rate.
MacDonald recommended that Congress eliminate any legal barriers that discourage physicians from posting their prices and that it eliminate hospital administrators’ fear that Medicare will punish them for offering uninsured patients the same kinds of discounts that they offer insured patients.
Links to written versions of the witnesses’ remarks are on the Web at Document Link