Price Check: The Mystery of Hospital Pricing
California HealthCare Foundation
December 2005
In 2004, the California Legislature passed… AB 1626, requiring hospitals to provide information to patients on fees for 25 common services and to post notices informing patients that information was available to them.
That same year, the California Hospital Association developed and encouraged member hospitals to adopt voluntary guidelines… that hospitals should have clearly stated written payment and financial assistance policies, that hospitals should post notices about these policies, and that hospitals should train staff on communicating these policies.
In an effort to evaluate hospital-pricing practices, the California HealthCare Foundation sent a group of would-be patients to 64 hospitals throughout California. These “mystery shoppers” posed as low-income, uninsured patients who needed to find a hospital for an upcoming test or procedure.
Key Findings
* Better systems are needed
* Getting a price can be a frustrating process
* Type of procedure partially determines whether hospitals provide a price
* Hospitals must expand training to ensure employees understand how to deliver pricing and payment information
* Hospital pricing information is inconsistent, making it difficult to shop for the best value
* Financial assistance can be a “Catch-22”
* Written notices communicating financial assistance are often inadequate or inaccessible
Although some of the shoppers had positive experiences, overall the project revealed a wide communications gap between hospitals and their patients – a gap that has poor implications for patients who must pay all or part of their medical bills.
http://www.chcf.org/documents/hospitals/
PriceCheckMysteryHospitalPricing.pdf
Comments: Access to health-care price information theoretically would be important not only for the uninsured (over 6 million in California alone), but also for the insured if price sensitivity of consumer-driven health plans (CDHP) were to have any significant impact on reducing health care spending. This study demonstrates that voluntary efforts and even legislation have not been very effective in informing price-sensitive health-care shoppers of their options.
This report recommends that improvements be made in providing information on pricing, but this conclusion should be challenged on the basis that the framing of the problem was inappropriate.
Sending a patient out on his/her own, with very limited financial resources, to find best prices when options may be limited or nil, is not an effective policy for cost containment. If a patient needs a C-T scan or cardiac catheterization, that patient is really limited to the facilities that his/her physician utilizes if care is to be properly coordinated.
We should be directing our efforts to providing maximum value for beneficial health-care services. A much more effective solution would be to enlist the power of a monopsonistic, single-payer purchaser that would negotiate for all patients not only the best prices, but also the best services and products.
It’s time to give up on bending or breaking the health-care system merely to make it pliable to free-market competition. What is this really all about?
The whims of free-market theorists, or the health of the people?