Does Price Transparency Legislation Allow the Uninsured to Shop for Care?

Abstract

BACKGROUND:The majority of states have enacted price transparency laws to allow patients to shop for care and to prevent price discrimination of the uninsured. In California, hospitals must provide a price estimate to a requesting uninsured patient and cannot bill for an amount greater than the reimbursement the hospital would receive from a government payer. OBJECTIVE:To assess the response rate of California hospitals to a patient price request and to compare the price estimates received to Medicare reimbursement. DESIGN:We sent letters to California acute-care hospitals from a fictional uninsured patient requesting an estimate for one of three common elective procedures: a laparoscopic cholecystectomy, a hysterectomy, or routine screening colonoscopy.PARTICIPANTS: Three hundred and fifty-three hospitals in California.MEASUREMENTS: Hospital response rates, difference between price estimates received, and Medicare reimbursement for equivalent procedures. RESULTS:Only 28% (98/353) of hospitals responded and their response varied in content. Of the 98 responses, 15 (15%) did not provide a quote and instead asked for more information such as the billing code, 55 (56%) provided a price estimate for hospital services only, 10 (10%) included both physician and hospital services, and 18 (18%) did not specify what was covered. The median discounted price estimate was higher than Medicare reimbursement rates for all procedures: hysterectomy ($17,403 vs. $5,569; p<0.001), cholecystectomy ($14,014 vs. $7,196; p<0.001) and colonoscopy ($2,017 vs. $216; p<0.001).CONCLUSIONS: Current California legislation fails to meet its objective of enabling uninsured patients to compare prices for hospital-based health care services.

Availability of Consumer Prices From US Hospitals for a Common Surgical Procedure

“…Viewed from an alternative perspective, only 60% of the top-ranked hospitals and 63% of the nontop-ranked hospitals were able to provide a complete price even after multiple calls to both hospitals and affiliated physician practices. Our results expand on the work of Farrell et al, 13 who mailed letters to 353 California hospitals in 2007 on behalf of fictitious patients requesting price estimates for 1 of 3 alternative elective procedures (a laparoscopic cholecystectomy, a hysterectomy for fibroids, or a routine screening colonoscopy). The investigators obtained an overall response rate of only 28% and found that only 3% of hospitals (10% of responding hospitals) were able to provide complete price estimate (hospital fee and physician fee).…”

“…While pricing transparency initiatives such as CastLight Health (http://www .castlighthealth.com) have garnered widespread media attention, 11 there is very little peer-reviewed research addressing the availability of price data for medical services. 12,13 It is unclear how feasible it may be for patients to obtain pricing data for common medical services and how price estimates might vary by health care provider.…”

Evaluating Cost Awareness Education in US Pediatric Emergency Medicine Fellowships

“…The opacity and confusion surrounding medical costs is well documented. 29,30 Price disclosure and effective transparency initiatives would benefit not only consumers of health care but also providers in working toward cost-conscious health care delivery. From an education standpoint, while the task may be daunting, the process of developing a cost curriculum would in itself be informative for the local clinical microsystem, and the ensuing debates could contribute to a more informed national discussion of medical costs.…”

The Out-of-Network Benefit: Problems and Policy Solutions

“…This would allow consumers to calculate balance bill amounts for individual service units, although it would still be difficult to calculate total out-of-pocket payments for an episode of care. It should be noted that previous efforts at public reporting of cost information have not been widely used by consumers, possibly because information is not presented in ways that are meaningful or accessible (Farrell et al 2010;Tu and Lauer 2009; U.S. Government Accountability Office 2011).…”