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New rules on hospital price lists fall short

January 26, 2019

Having hospitals post price lists online so consumers can make informed decisions when it comes to their health care is good public policy. If that information is not user-friendly, however, it’s close to worthless.

A rule change by the Centers for Medicare & Medical Services that took effect Jan. 1 requires all hospitals to publish price lists for the thousands of procedures, tests, drugs and supplies that might end up on a patient’s bill. The information previously was available only on demand.

Regrettably, the policy change did not mandate hospitals adopt a universal language, or even one that makes sense to non-medical professions. Each hospital is allowed to format the information — commonly referred to as chargemaster price lists — in any form they choose, making it difficult for a layperson to decode.

Further complicating matters is that the raw costs provided on the lists do not reflect out-of-pocket expenses a patient might incur or price reductions that the hospital has negotiated with government or third-party insurers.

The information that is now available online had previously been accessible if clients make in-person appointments. It appears those appointments might still be necessary if a consumer is serious about decifering the information.

Making quick apple-to-apple comparisons is nearly impossible under what has been established. It has little value to the patients.

Information is a powerful tool, but that information must be meaningful to be useful. Hospital care is pricey and accounts for one-third of all health spending in this country. Last year, hospital care totaled $1.1 trillion, and most patients, even those who went in for elective surgery, were unaware of the costs until after bills arrived.

Transparency was the well-intentioned goal. Instead, we are getting a very fuzzy, confusing picture. Some major fine-tuning is needed if this is going to be a tool that allows consumers to do price comparisons and encourages competitive pricing among providers.

As they currently exist, the price lists are of limited value, and at least one Texas hospital has offered a disclaimer about the usefulness of the information on its website.

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