PNHP

CMS pushes price transparency

Administration Offers Consumers an Unprecedented Look at Hospital Charges

Centers for Medicare and Medicaid Services, May 8, 2013

New data released today show significant variation across the country and within communities in what hospitals charge for common inpatient services.

ā€œCurrently, consumers donā€™t know what a hospital is charging them or their insurance company for a given procedure, like a knee replacement, or how much of a price difference there is at different hospitals, even within the same city,ā€ Secretary Sebelius said.

These amounts can vary widely.  For example, average inpatient charges for services a hospital may provide in connection with a joint replacement range from a low of $5,300 at a hospital in Ada, Okla., to a high of $223,000 at a hospital in Monterey Park, Calif.

“Transformation of the health care delivery system cannot occur without greater price transparency,” said Risa Lavizzo-Mourey, M.D., RWJF president and CEO.

http://www.cms.gov/apps/media/press/release.asp?Counter=4596

Medicare Provider Charge Data: http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Medicare-Provider-Charge-Data/index.html

Comment:

By Don McCanne, M.D.

So now we have access to hospital chargemaster prices – meaningless numbers that nobody pays. And that is going to make us better health care shoppers?

What matters are payments, not prices. Actual payments are negotiated prospectively by private insurers, and even more effectively by Medicare. Cash paying patients usually feebly attempt to conduct negotiations retroactively, if they pay at all.

This CMS effort on hospital price transparency will have almost no impact on controlling total health care spending since chargemaster prices are a fabrication.

There is a far better way to control spending without forcing patients to make unwise health care decisions in their efforts to avoid the financial burdens of health care. Each hospital should be placed on a global budget, just as we do with our police and fire departments. That way, services are rendered simply when needed, without having an associated price tag.

Requiring price shopping as a prerequisite to health care access is anathema to health care justice.