Price transparency has gotten better, but still needs work to make costs clear to patients, a new study finds.
Hospital health care prices were all over the map in a study by researchers who used a secret shopper approach to inquire about costs of births and brain scans.
The researchers found “wide variation” between hospitals’ cash prices posted online and those available by telephone. The result: Lawmakers, regulators, and patients who want price transparency for medical services, probably aren’t getting it.
“These results demonstrate hospitals’ continued problems in knowing and communicating their prices for specific services,” said the original investigation, “Comparison of Hospital Online Price and Telephone Price for Shoppable Services,” published in JAMA Internal Medicine.
The U.S. Centers for Medicare & Medicaid Services (CMS) began the Hospital Price Transparency Rule on Jan. 1, 2021, requiring most American hospitals to make their prices available online. Studies show hospitals are getting better about doing so, and patients may find opportunities for savings, especially if they don’t have health insurance or have high-deductible health insurance, according to investigation.
The researchers sampled 20 top-ranked hospitals, 20 safety-net hospitals, and 20 non-top-ranked, non-safety-net hospitals last year. Based on Current Procedural Terminology codes, by phone and online data, they collected lowest cash prices for vaginal childbirths and brain magnetic resonance imaging (MRI). CMS requires those procedures to be shoppable, and they are commonly used and usually preplanned, so patients theoretically could shop around for the best prices, the study said.
“Among all hospitals that provided both online and telephone prices for the same service, the correlation between prices was poor,” the study said. Among hospitals with both online and phone prices, just 14% matched prices for vaginal childbirth and 19% matched for MRI.
There were 58 hospitals offering vaginal childbirth. Among them, there were 22 (38%) with online and phone prices; five (9%) with only online prices; 26 (44%) offered only phone prices; and five (9%) had no pricing information available. The online prices ranged from $0 to $55,221; phone prices ranged from $3,401 to $100,000. There were five hospitals with online prices more than $20,000, but with telephone prices of less than $10,000.
For MRI, all 60 hospitals had some price data: 47 (78%) had online and phone prices; seven (12%) had online prices only; and six (10%) had just phone prices. Cost online ranged from $418 to $166,994, while phone prices ranged from $80 to $8,920. Two hospitals had telephone prices more than $5,000, but online prices approximately $2,000.
To explain the differences between online and phone prices, the researchers considered whether hospital billing staff did not understand the telephone inquiries, or were not adequately trained to deliver prices.
“Absent improvements in customer service, public frustration with hospitals is likely to grow,” the study said.
Within hospitals, prices for childbirth and MRI didn’t correlate. That raises questions about whether hospitals have cogent pricing strategies or just “a chaotic and disorganized pricing structure,” the study said.
The between-hospital price differences were consistent with other studies. It appeared some prices were erroneous – the study noted the $0 cost for a childbirth and the MRI cost of $166,994. CMS can levy fines up to $2 million for hospitals that don’t post prices, but there is no formal mechanism for auditing data for mistakes, or penalizing those.
“At best, such erroneous prices may be amusing, but at worst, such errors may trigger further public annoyance with and distrust of our health care system,” the study said.
The researchers noted 90% of Americans have health insurance. But 70 million people have high-deductible plans and an estimated 7.9 million people of child-bearing age don’t have insurance.
Because of that, “we would contend that it is important for hospitals and health systems to be able to provide real-time price estimates that are accurate,” the researchers said.