Hospital price lists are a good idea, but let’s wait until 2021?

by philg

“Hospitals Sue Trump to Keep Negotiated Prices Secret” (nytimes):

The nation’s hospital groups sued the Trump administration on Wednesday over a new federal rule that would require them to disclose the discounted prices they give insurers for all sorts of procedures.

The administration wanted the disclosure rule, which would go into effect in 2021, to allow patients to better shop for deals on a range of services, from M.R.I.s to hip replacements.

It is the 2021 part that fascinates me. There is enough time between now and 2021 for China to build an entire Manhattan worth of office and residential space within each of a few of their larger cities, to open another 2,000 miles of high-speed rail, to add some metro lines in their secondary cities, etc.

If hospitals have all of these prices in their computer systems (funded by tax dollars) and this is a good idea, why wouldn’t the regulation be for them to push them out onto their web sites within a few months?

48 thoughts on “Hospital price lists are a good idea, but let’s wait until 2021?”

  1. Recent experience at a hospital: I need an MRI. After consulting with the doctor to determine that he would recommend the MRI and also lobby my insurance provider to cover it, I said:

    “Well, it’s right in this building, they’re done all the time, several times a day. How much does it cost and will my insurance cover it?.”

    “I don’t have pricing information on services like that and I have to submit the request to your insurance company.”

    Four days later I got the call that I could schedule the scan (I told them in no uncertain terms *not* to schedule me until I was sure about the coverage cost and my liabilities). I still don’t know what the cost is, and how much the insurance company is being billed, but apparently it was approved in total. I was asked the standard litany of pre-MRI questions (“Do you have any implants in your body? Will you need help getting on the table? etc., etc.) but I could not get a straight answer to the question of how much the scan costs, even a ballpark figure. Nowadays, this is a straightforward noninvasive procedure, more technologically complicated than monitoring blood pressure but not more logistically difficult, and certainly not risky, unless you’ve got a piece of metal somewhere in your body that you forgot about.

    The pricing information is the Holy Grail and the hospitals in concert with the insurance companies do not want the information being published, that’s my guess. Some of that may be justified, but I’ve not read a good argument why, from the point of view of anyone with longstanding experience in hospital billing and administration. All of this is set up using the hospital’s IT system including all my medical records, and the billing must be integrated into that system, so you’re right – it must be in there. It would be interesting to know if they have agreements with insurance providers *not* to release the billing information that now must be amended or overcome in order to comply with the law. Hence the delay while everyone scrambles?

    Imagine if you discovered that the $6,000 MRI your insurance company just paid for (with whatever deductible) only costs $3,900 at the MRI center two towns over?

    • You don’t get how the game is played. You get the MRI without checking anything out about prices or your coverage. You wait five months for the crazy bill in the mail. You wait another five months and ignore some phone calls and collections warnings. Then you call them up and say “I lost my job and I’m broke. I can pay $bill/5 right now or nothing.”

      USA healthcare isn’t super expensive once you understand this.

    • In 2009 (when I last paid for one) an MRI in Lebanon, PA area was $1100 at the imaging center, about $3k at the hospitals. The imaging center chain of 3 locations, was owned by the head of radiology dept at a local hospital (that is, you could expect the same level of competency).

      One of the other hospitals bought him out and merged the clinics into their system. Did the MRI price from the hospital drop? Don’t be ridiculous!

      BTW always ask for the billing code. With that, you can get pricing.

  3. I wonder how they’re going to handle the in-patient versus outpatient rules and prices. In the case of Blue Cross (federal program), I have this theory that they put the younger, gainfully employed folks who can manage the 15% co-insurance in the out-patient surgery center, while they admit to the main hospital the Medicare, Medicaid and uninsured folks, and those facing more major surgeries (which can’t be done outpatient — so that’s the only reasonable part), as the co-pay is a fixed $200? $250? in the case of BCBS, and probably much less for a Medicare patient. This is all part of the subsidy the insured are transferring to the Medicare/Medicaid/uninsured patients. And it’s one small part of the $trillions in budget debt thanks to underfunded Medicare & Medicaid. I’m no expert, just the dependent spouse on a BC plan we’ve had since the 1980s. But the director of our local hospital (Beebe Medical in Lewes, Delaware) acknowledged in an article I read (might try to find again) that there’s a huge difference if you’re insured, and likely to pony up the co-insurance, versus if you’re indigent. SNAFU

  5. I can beat the MRI story. Try pricing out a transthoracic echocardiogram. This is a non-invasive ultrasound, ie, what your wife will get when she’s pregnant, but instead of checking out the baby, it covers the chest. It takes about 45 minutes and is done by a tech on a machine (a very nice computer with a very display and a very specialized keyboard and an ultrasound transducer) that this page says probably costs about $75K https://www.costowl.com/healthcare/healthcare-ultrasound-machine-costs.html, maybe $100K.

    So non-invasive, 45 minutes, cheap machine, done all day long at heart centers.

    UCSF charges $8,000 for that procedure, paying for the machine in just one day.

    If you google cost transthoracic echocardiogram, you’ll find mdsave says the national average price is $1700, the nytimes says Harvard charges $1400 but the nearby community college charges $5500 and blogging cardiologists even suggest going to India, Mexico, Puerto Rico to have the exam done then having your local cardiologist interpret it.

    And yes, when I call the local facilities, it’s almost impossible to find out ahead of time what they will charge. UCSF admitted they charge people with “good insurance” a lot in order to pay for people with poor or no insurance. That $8K from my good insurance got directly translated into a 40% copay from me, thanks UCSF, I expect you to name a room after me.

    (This year, I will have two of these tests done…) (Sigh)

    • Yeah that wins, hands down. The MRI machine is a honkin’ huge piece of equipment worth several million dollars that requires highly specialized power, shielding, environmental control, custom installation, contracting, relatively esoteric construction and building specifications, specialized operators, lots of computing power, etc., etc. a TTE scan is a rectal thermometer by comparison and I’ll bet you feel like that’s where they left the machine. Do they give you anything for the blood pressure after you get the bill? Do they at least ask if you have made will and estate plans before you get the scan?

    • The internet alleges you can find a slightly used MRI machine on Craigslist for as little as $150,000 but I don’t think my neurologist wants to look at the etch-a-sketch version of my brain (as much as I have to, at least.)

  6. Oh, at any rate, I think an important part of any medical reform is providing each patient with an easily understood itemized bill on the way out and making it easy for patients to shop around for prices on the way in.

  7. They need the time because they’re going to have to re-price everything before they publish the prices.

    • Indeed, as there is different Medicare “negotiated” price versus Medicaid max versus the other 50+ private insurance plans “negotiated” rates. At least the full price which they used to publish in order to imply that the allowable your insurance co negotiated was somehow not absurd will no longer have to be included????

  8. They have to hire a management consulting company (McKinsey, BCG or Bain) first to check the pricing and make sure that they are making a good business decision, this is why it will take till 2021.

    Some notes from Canada, one of my relatives had cancer (one of the treatable ones), took a couple of weeks to see a specialist, treated in a couple of weeks and in remission for over a year now. This was all provided by the Canadian Health Care single payer system, paid for by Canadian tax dollars. How much did it cost, it takes a bit of digging to get this information, but it is available. Another relative needed a MRI, appointment in about 5 weeks, in the middle of the night on a weekend. MRI machines in Canada are run 24/7 to maximize their use and benefit. Cost also covered by the Canadian Health Care single payer system.

    On a per-capita basis Canada spends about $3,678 USD vs the $6,714 USD for the US. A common misconception is that the Canadian system is some socialist system that is not efficient. Most doctors are incorporated, running their practice as efficiently as possible, so it looks like Canadian doctors are about twice as efficient as US doctors. Another difference is that Canadian doctors only have to deal with one bureaucracy, meanwhile US doctors need an army of lawyers to handle the paperwork with many rent seeking enterprises, resulting in great inefficiency. If you are a resident of Canada, it does not matter if you are in the top 1% or the bottom 1% or somewhere in the middle, you will get pretty good quality care without having to pull out our credit card and go bankrupt.

    And if you really can’t wait for an MRI in the public system, we do have some private clinics in Canada
    A routine brain scan will cost you $895 CAD, about $676 USD.
    https://www.canmagnetic.com/scans-rates/

    Even the private Canadian clinics are much more efficient than any clinic or hospital in the US.

    • The billing harlequinade has an easy-to-determine price. Doctors can outsource all of the interaction with the insurers to a billing service. A Google search shows that they take no more than 10 percent of revenue, but I dimly remember a cardiologist friend saying it was closer to 16 percent and some web sources say that it can be closer to 7 percent.

  9. By 2021 Jane Fonda will stop getting arrested but will need long-term medical care for the abuse she suffered at the hands of the DC police, so they decided to wait until she’s ready for the next cause.

  11. I can say one thing that should be done right now, today. Ambulance services. There is no reason on the face of this earth that people should have to pay thousands of dollars for a ride in an ambulance unless that ambulance is mounted on top of a SpaceX rocket and they are in it for the fun. Seriously, everyone in America should be screaming about the price of ambulance rides. I know, this is complicated too. In-network vs. out of network hospital visits. It’s a crime. The best thing you can do in the immediate sense is to support your local volunteer rescue squads, most of which operate within the towns they serve for FREE (or nearly free) and rely on your local donations to keep them running.

  12. A lot of interesting comments, but nobody has answered my question! If this will make health care more efficient and health care is 18 percent of the GDP, why would the government want to wait until 2021? (plainly the hospitals want to wait until 2021 and beyond, but why do they get to determine the take-effect date?)

    • Aside from my answer below, the only other answer I can think of is so that the next administration/congress can take credit for it. The boilerplate arguments that “it’s too complicated” and couldn’t be done in six months for many of the more common procedures, doesn’t hold water with me. So I’m betting they’re waiting because: 1) They want a Democrat administration to be able to claim credit for bringing it to fruition and holding health care providers and insurance companies responsible and 2) There’s going to be a big website rollout (and maybe several) and people will shop for health care procedures using Amazon (or Google Health, or Microsoft Health Windows) like they buy books, vitamins and herbal enema kits, and survival gear.

    • As indirect supporting evidence for this, I note that Hillary Clinton just emerged as the top choice of (D) voters, in a poll conducted by…Harris, released by the Center for American Political Studies …at Harvard. The fix is in. The greatest thing in the world for Hillary Clinton to run on would be a promise to make health care prices available to everyone in the country: “And as part of my promise to the American people, we’re going to make it easy for everyone to know the prices of medical care and comparison shop.”

      https://www.washingtontimes.com/news/2019/dec/9/hillary-clinton-emerges-top-choice-democratic-vote/

      Veni, vidi, vici. It’s Act III of the Clinton Administration and it’s going to be a big government / big tech. partnership that will revolutionize health care in America.

    • I know, I know, it sounds a little crazy. But it’s no crazier than Hillary Clinton being interviewed by Howard Stern. And it makes tremendous sense from the Clinton Entitlement Reparations perspective. She and Bill were ROBBED, first by the Party selecting Obama and then by the Russians getting Donald Trump elected. The only thing on Earth that will set world back on course of righteous justice (after Trump’s impeachment and/or defeat at the polls) will be for Hillary Clinton to become President and usher in a new era health care transparency and openness, and holding the insurance companies responsible. My God it will save us all and set the world right.

    • I will also note in passing that in terms of organizational trust, Amazon.com regularly surpasses the only other institution that even registers as trustworthy with the majority of Americans, which is the U.S. military. Amazon beats the military, and they’re the only one. They will be perfect for this task. I have evidence of the trust polling: Here’s Bezos at the Reagan National Defense Forum 2019. Go to 7:30 here.

      https://www.youtube.com/watch?v=YG4mWQQOPAw

      So, you take the online retailer that has public trust higher than the U.S. Military and you alloy that with Jeff Bezo’s indomitable spirit that nothing is too complicated to undertake, mix with Hillary Clinton’s leadership in the aforementioned poll, and you have the perfect storm. Hillary is going to out-do, reboot and remix Obamacare along with big tech. and bring redemption to the land of the Philistines.

    • > why would the government want to wait until 2021?
      I believe this is a misunderstanding. The administration agreed to wait until 20:21 and then someone (Deep State???) deleted the colon.

  13. Is there any other industry that deals with the public in which the prices for goods and services aren’t available to the consumer? Even higher education publishes tuition and fees, financial aid information, and in some cases exhaustively detailed schedules of prices, right down to the cost of food and meal plans in the cafeteria, living in on-campus and off-campus housing, ad nauseum. When you buy drugs from a drug dealer, you know how much to bring. When you buy a car, a house, rent an apartment, or use any other kind of service that’s run by a business with money changing hands, you can get the prices in advance.

    Here’s an idea: maybe the delay to 2021 is going to allow someone in silicon valley to start a website (maybe Amazon!) for people to comparison shop medical care. That would make more sense than almost anything as a reason for the delay. So who is going to be first? I’m betting on Jeff Bezos.

    • I can’t believe I didn’t realize it before. That’s what it HAS to be. It must be so that the big tech. companies can get a year’s head start on rolling out their comparison and enrollment services. You’ll be able to shop for a transthoracic echocardiogram using your iPhone. And THAT is the next wave of commercialization/gamification of private medical data. It’s going to be big tech. I can’t see any other way, can you?

  14. American voters: “No dammit! Hospitals shouldn’t disclose how they’re ripping us off! Trump must disclose his tax returns tho.”

    • So your theory is Democrats are against healthcare reform?

      Shameful how they held back the Trumps reforms over his first two years in office!

    • No one is against healthcare reform at this point (similar to the environment — who exactly is against Mother Earth?). But HRC failed big-time back in the 1990s when tasked with health care reform (there were rumors of her having some bias in selecting the guy/potentially having trysts with Magaziner who headed up that task force, but I digress . . . ). So I give the Dems a failing grade, and they are too cozy with Big Pharma for me to trust them. Obamacare flooded the market with new customers, but did nothing to control costs. Everyone on here is familiar with basic microeconomics, so realizes that didn’t work out too well.

    • Republicans were unified in opposition to the “public option” of Obamacare, and Democrats split under the dissent of Lieberman. Repubs then took control of both houses and failed to repeal Obamacare, or improve it.

      Ds > Rs for “public option” cost control it looks like.

      “No one is against healthcare reform at this point (similar to the environment — who exactly is against Mother Earth?).” – Republicans are against both but..

    • Americans are a bunch of obese, flocked-up whackjobs who can’t figure out which way they enjoy killing themselves more. Why are we surprised healthcare costs so much? I feel sorry for the doctors, I’d quit if I were them.

      “Take care care of yourselves, a**holes! We’re going to Costa Rica. Don’t push this red button after you hook up those wires over there, you’ll find out why.”

    • January, 2020 issue of the JAMA:

      EXODUS
      We Quit.
      Take Care of Yourselves!
      We’ve Had Enough.
      – The Healthcare System

  15. OK I started off with the election / big tech idea, but let’s work backward for a second:

    If you were the hospitals and insurance companies, you know you have this data, you have the prices because you negotiate them on a continuous basis, every day, in a variety of patient/provider contexts. What would you be most afraid of as the result of disclosing them? You would be terrified of being sued. What could you be sued for? Price fixing? Racketeering? Unfair trade practices? Class-action lawsuits on behalf of thousands or millions of financially injured consumers? Wrongful death lawsuits on behalf of people who couldn’t afford services because they didn’t know cheaper alternatives existed? All of the above and more?

    When I think of the potential liabilities these entities would be guarding against, the only way that I can see they would agree to greater disclosure is in the context of some kind of immunity from being sued for complying with the law. What would that take?

    It would require, effectively, that the United States government guarantee that they can’t be sued for complying with the law, and they will continue to fight against disclosure using every legal argument they have until they can be assured of that immunity.

  16. From a software dev perspective, are all the requirements in the disclosure rule legislation?

    How long does a typical RFP tender process take a large organisation, lets say 3 months?

    1-2 mos RFP writing process, 3 mos tender to get IBM in, 4 3-week sprints to implement, 2 months of audit and testing ( you’re interacting w/ HIPAA systems ). Looking at 10 months to get a production website up.

    Seems reasonable* of a large healthcare business project timeline.

    * obv it’s crazy, but welcome to enterprise software dev

  17. This just in from Nostradamus’ assistant and chief bottle washer, Matt Drudge:

    “More Americans Delaying Medical Treatment Due to Cost”
    https://news.gallup.com/poll/269138/americans-delaying-medical-treatment-due-cost.aspx

    “While most of the increase Gallup sees in delayed treatment occurred over a decade ago, the sharp increase in the past year, particularly among Democrats, suggests that healthcare costs could be a more potent political issue than previously seen. Presidential candidates who acknowledge the problem and propose solutions to address it may find a receptive ear among voters.” They don’t say…

  18. Everyone loves going about China HSR. You do realize it’s a cash, furnace, right? HSR is a boondoggle absolutely everywhere it exists. In Japan, JR went bankrupt after building out all that HSR and the Japanese government had to assume the debt. The debts attached to the Chinese HSR network are totally unpayable.

    Most commuter urban rail lines are also obsolete because Bus Rapid Transit is so much more efficient. It’s interesting to me that people watch China build uneconomic urban infrastructure and clap like seals over it. There’s a bizarre rail fetishism all over the world.

    • @tygertgr:

      I admit, it does sound like I was clapping like a seal. More honestly, I don’t have a dog in the fight about transit rail vs. bus rapid transit and commuter rail except for the fact that in Massachusetts we paid north of $700 million dollars to pay for the privilege to build Chinese made trains (we turned down the American companies). They aren’t reliable and the MBTA is so terribly mismanaged and maladministrated that now the legislature wants to toll passenger cars by the mile for another infusion of cash. The Orange Line in particular has been so unreliable recently that we’ve had to *fall back* to bus transport. Look at this insanity:

      “Report: MBTA’s Approach to Safety is ‘Questionable’
      https://patch.com/massachusetts/medford/s/gxxij/report-mbtas-approach-to-safety-is-questionable

      The report, which made 34 recommendations, which contain 61 individual corrective actions,
      said turnover in the T’s leadership and a requirement that management meet 36 times per year has compounded the problem. “Staff preparation to meet the needs of the Board is overwhelming and leaves staff little if any time to tend to the operation or the maintenance of the system,” the report said.

      The report, which made 34 recommendations, which contain 61 individual corrective actions,
      said turnover in the T’s leadership and a requirement that management meet 36 times per year has compounded the problem. “Staff preparation to meet the needs of the Board is overwhelming and leaves staff little if any time to tend to the operation or the maintenance of the system,” the report said.

      The Board meets three times a month and suffers from so much turnover that apparently all they have room for is scheduling meetings and producing new documentation for the Board to keep meeting. And they’re worried about Obstructive Sleep Apnea. “The MBTA has “no meaningful” quality assurance and quality control program. ”

      This is in Massachusetts, the home of MIT, Harvard, Tufts University, Boston University, the Rt. 128 Technology corridor, all the biotech in the Boston area, etc., etc.

    • You get the feeling given the history that all the spending in Massachusetts is designed and administrated purposefully so that the systems fail and require massive new transfers to keep them failing. The question goes to the core competency of the educated class of our society itself. How can we run a country with leadership like this?

    • I suppose that in China they just forget the debt ever happened and allow the tourists to continue to take pictures of it. In Massachusetts, that won’t do: instead they have to hire more administrators, produce more reports, implement new programs, increase transfers, tolls, the gas tax, and shaft the public again for systems we’ve known how to build, maintain and administrate since the turn of the 20th century. But we can’t do it now.

      Seriously it all reminds me of Will Self’s (fiction) novel: “The Quantity Theory of Insanity”

      “What is there is only a limited amount of sanity in the world and the real reason people go mad is because somebody has to?”

      https://www.amazon.com/Quantity-Theory-Insanity-Will-Self/dp/0802121462

      When the reality makes you question whether his book is a work of fiction or just a thinly-veiled recapitulation of actual circumstances, something is wrong. The comments on the Patch page feature people trying to blame the Republican governor for this, in a 9:1 D:R state where the rent seeking has reached levels last seen in the Roman Empire just before the fall.

  19. tygertgr: Does it matter that high-speed rail and gleaming metro systems are unprofitable? Why can’t they be public luxury goods for a rich society? A 10-year-old Toyota Camry with 100,000 miles on it would be much nicer than any of the cars that I grew up with, yet we don’t criticize people who buy new cars (we even tax poor people to subsidize the sanctimonious rich in their Teslas!). The Chinese understand buses and operate a great network within Shanghai that I used (I explained to my local companion that the spotless new bus did not serve the same valuable social function that buses in the U.S. serve, i.e., a place for the poor and the very poor to meet). Certainly they could have built a long-haul bus network for less money than HSR. And they could presumably have gotten people from city to city less expensively by building more airports and building/buying more airliners (Airbus A380 in high-density seating config if you need to more a comparable number of people to what a Chinese train holds).

    But the HSR is its own kind of luxury. Passengers won’t get motion sick, unlike on a windy day plane trip (or an any-day Amtrak tilting Acela trip!). People on the ground don’t have to hear jet engine noise.

    Metro systems are also luxurious. You are 99.9% sure of arriving at your destination within the time budgeted, regardless of weather and traffic.

    Mobility makes people happy, right? They get to see friends and family and new places. Except for a handful of super douches, no individual is rich enough to build a metro or HSR system (and at NYC or California prices, even the super douches aren’t rich enough!). If we think tax-and-spend government is legitimate, why wouldn’t this be a worthy use of tax dollars? (taxing $20/hour workers in NYC to enrich cronies of local Democrats would perhaps be an exception; see https://www.nytimes.com/2017/12/28/nyregion/new-york-subway-construction-costs.html : The agreement for Local 147, the union for the famed “sandhogs” who dig the tunnels, includes a pay rate for most members of $111 per hour in salary and benefits. The pay doubles for overtime or Sunday work, which is common in transit construction. Weekend overtime pays quadruple — more than $400 per hour.)

  20. To answer your question, I think the 2021 date is to give the hospitals TIME after the rules become law. I do not think they know right now what a given procedure costs. I think they guess and use actual costs for departments as whole (MRI, XRay, nursery, etc.) to negotiate with insurance companies. Then they price the individual task codes as required by Medicare. But they only look at profits as a whole for the various departments and various classes of patients.

    So I think the whole economics of how hospitals are managed is all messed up. And this law is the first attempt to force them to find the prices and fix their management processes.

    Bill

    • @Bill (Epic employee?) first cogent explanation of how hospital admins come up with prices for various groups. The head of a hospital here in Delaware basically admitted she’s not allowed to divulge the Medicare “allowable” if the patient dared wonder why a 10 minute exam and a 10 minute X-RAY for your kid who sprained his finger playing football costs almost $500 in the Emergency Department (unless you can prove that the “accidental injury” occurred within the prior 72 hours, in which case it’s 100% covered with no co-pay/co-insurance for the subscriber). Whereas if his 65+ yo grandfather appeared at the ED with a sprained finger, regardless of when he sustained the injury, there would be no balance, or at most $10-$20 co-pay. I am wondering whether the public will learn the Medicare & Medicaid rates???? Those groups, plus the uninsured, seem to get a subsidy from the paying/insured non-Medicare patients as best I can tell.

  21. Both of us have been on Medicare for a while. I think the reimbursements are too low for many things but who knows if I have all the data. I see more Doctors/Hospitals refusing Medicare in the future. Wife had to have major surgery this year that lasted 4 hours. Total bill for that and three days in hospital was close to $90K list price. Medicare paid the hospital $5K and the surgeon $500 for the whole thing. I paid $1.5K more. So not much for all that work. I am not sure the place can stay open at those prices. But it is a very old teaching hospital so maybe they save $$ in unusual ways.

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