Tracy Porter Weighs In On Hospital Price Lists
Tracy Porter is a member of Indigo Anchor’s Scientific Advisory Board and is also an Assistant Professor of Management specializing in Healthcare Administration at Cleveland State University. She was recently interviewed by The Plain Dealer about the growing trend of hospitals to publish their fees on their websites. We have republished the original article below.
CLEVELAND, Ohio – A recent requirement for more transparency in hospital pricing could be the first step in transforming the healthcare industry into a consumer-driven one, making shopping for a procedure more like buying a house or a car.
Under new federal regulations, hospitals have to post a list of service prices, called chargemasters, on their websites. However, these lists don’t reflect the final costs most patients pay. They don’t factor in the lower rates insurers negotiate, nor do they standardize the way that services are listed, making it difficult to compare apples-to-apples.
“What [the Centers for Medicare and Medicaid Services] has done is not the silver bullet, but certainly it is a catalyst toward moving the industry toward much more user-friendly retail comparisons,” said Jeff Price, vice president of payer strategy and population health operations for Summa Health.
Price said greater transparency will “allow consumers to make very-educated decisions.”
“It’s no different than just about any other industry that we as consumers live in,” Price said.
Tracy Porter, an assistant professor of management at Cleveland State University who specializes in healthcare administration, expects to see consumers planning for medical procedures the way they do when making big investments, such as a car or a home.
“There’s a big move in medicine to empower patients, to have them look at their own health care and own it to an extent,” Porter said.
Costs for expensive procedures aren’t always top of mind for consumers, many of whom meet their insurance deductibles and don’t see the full charges for their care. For so long, patients have just done what their doctors told them, said Porter. But that is changing as patients take a more-active role in making healthcare decisions and begin to choose where to go for treatment.
Some, like Heather Stanton of Valley City, are shopping around for care.
Stanton, who had her second child, Izabella, in August 2017, took tours of local hospitals before choosing the Cleveland Clinic Fairview Hospital to deliver her daughter. Stanton’s first child was born at the Clinic’s Medina Birthing Center, which closed just before Izabella was due, so she had to find a new hospital where she felt comfortable.
“I just liked Fairview better, and it was a little closer,” Stanton said. “Security was also great at Fairview.”
The federal government in January started requiring hospitals to post prices for services online. The move was an effort by CMS to increase transparency and elevate the role consumers have in making healthcare decisions, according to CMS Administrator Seema Verma.
“We believe patients are the most powerful force in our healthcare system in driving cost and value,” Verma said. “Today, patients are basically shut out of the process for driving value.”
But many say these lists, as is, aren’t that helpful.
“Most patients do not pay these rates as their specific healthcare plan coverage determines any out-of-pocket charges,” the Cleveland Clinic said in a prepared statement. University Hospitals did not respond to requests for comment.
It’s difficult to compare prices from one system to another because each labels services differently. Plus, there are many variations of each service. The Plain Dealer compared the pricing lists from the area’s major hospital systems and found significant variations in how services were categorized or billed.
For example, University Hospitals’ regional locations offer per day rates for a labor room, while other hospitals, including UH Cleveland Medical Center, use hourly rates.
When it comes to operating room rates, UH assesses a setup fee, whereas the Clinic charges a fee for the first 30 minutes. MetroHealth, meanwhile, lists a set base rate for a room.
The federal government is still working on ways to make the pricing lists more useful to patients. But Verma said hospitals can go beyond the basic requirements on their own.
“Hospitals don’t have to wait for us to go further to help patients understand,” Verma said.
Pomerene Hospital, for example, doesn’t just provide pricing lists for services. The Millersburg hospital also shares bundled prices, or total cost for procedures, because the hospital has a lot of self-pay patients in the Amish community.
Right now, the federal government doesn’t have a mechanism for enforcing the price transparency rule. But all of the hospital systems in Northeast Ohio have complied.
In fact, many local hospitals say they have long offered consumers price estimates, either through self-service tools online or via hospital staff.
MetroHealth for years has posted the prices of its most frequently used services online and, in 2015, launched an online cost estimator tool, said Donna Graham, executive director of revenue cycle for MetroHealth. The system also has staff in place to answer questions about cost and to help patients figure out ways to get services covered.
“This is not new to us,” Graham said. “In January, we just extended the pricing we had already provided.”
The link to the pricing list is on MetroHealth’s landing page. From Jan. 1 through mid-February, there was a 58 percent increase from the previous year in visits to pricing information, Graham said.
Verma called increasing price transparency “an important first step” in giving patients more control.
The increase in price transparency comes at a time when the industry is being held more accountable for quality, with the proliferation of things like accountable care organizations. ACOs grew under Obamacare and reward Medicare providers for working together to provide high-quality care more efficiently.
“The solution is not as simple as just revealing prices,” Verma said.
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