Same surgery, different price: New rules could improve health care price transparency
These kinds of top-down regulations have limitations when the interests of health care providers, payers and consumers are fundamentally misaligned.
- Michael S. O’Neil is senior vice president, strategy & development, for Healthcare Bluebook
“Would you like Wednesday or Friday?” the medical scheduler asked.
That simple question catches many people flat-footed. It’s easy to take it at face value, look at your calendar and determine which date you prefer for a needed surgery. In my case, it was an arthroscopic surgery for a torn meniscus — one of the pieces of cartilage in the knee that, when damaged, can cause significant pain and swelling.
But there are consequences to selecting a surgery date that go beyond the block of time on your calendar. For me, there was about $11,000 hanging in the balance.
That’s because behind the question of Wednesday or Friday was the issue of where the surgery would take place. On Wednesdays my orthopedic surgeon practiced at his affiliated hospital. On Fridays he performed procedures at the outpatient surgery center located literally across the street. The cost for his work was about the same at both locations, but the facility fees at the hospital led to a price tag that was about $11,000 higher than the cost for the same procedure, with the same doctor, at the outpatient location across the street.
A key question
Luckily for me, I work at a company that’s dedicated to revealing the truth about the quality and cost of care so we can support higher value. I knew to pause and ask the difference between Wednesday and Friday, and then the choice was a no-brainer.
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But what about everyone else? What about those who don’t know what questions to ask or how to uncover quality or cost information? You might not think twice about choosing Wednesday over Friday until you’re asked to open your wallet for a $5,000 deductible or 50% coinsurance — sometimes after the surgery is complete.
Incremental rules can help
It’s unfortunate that our health care system places the burden of identifying quality and cost differences on the patient — sending us on a sometimes fruitless scavenger hunt.
The system needs to take a wholistic view of these challenges to make reliable quality and cost information available to everyone.
The Hospital Price Transparency rule, which was effective Jan. 1, is a step in the right direction; it requires hospitals to post a “consumer-friendly” list of standard charges for more than 300 shoppable services.
The Transparency in Coverage rule is another — requiring health plans to offer online shopping tools by 2023 that let consumers to see the negotiated rates between their provider and their health plan, along with a personalized estimate of their out-of-pocket costs, for the most shoppable services.
The ideal evolution of health care
These kinds of top-down regulations have their limitations, though, especially when the interests of health care providers, payers and consumers are fundamentally misaligned.
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Still, incremental changes are a positive sign of progress. Ideally, our health care system will continue to evolve toward a place where all incentives are aligned around providing high-value care — quality care at a reasonable price — so patients will automatically be directed toward the right care setting for their health care needs.
Until then, I advise everyone to do their homework and ask lots of questions. Your health and your bank account depend on it.
Michael S. O’Neil is senior vice president, strategy & development, for Healthcare Bluebook, a leading provider of health care quality and cost solutions for consumers, employers, health care providers and payers. This column originally appeared in the Tennessean.
