The federal government is requiring hospitals across the nation to post their standard prices on their websites starting this year. Consumer advocates and industry experts say this is a step in the right direction, but the lists are still confusing to patients.
California hospitals are charging excessive rates for over-the-counter (OTC) medications such as aspirin and routine medical procedures, according to new data found in price lists. Oakland’s Highland Hospital charges $131 for a single chest X-ray and the University of California San Francisco Medical Center charges a whopping $2,618. Aspirin tablets at Highland are $7 even though it’s $1.02 at Santa Clara Valley Medical Center and 30 cents at Walnut Creek’s John Muir Medical Center. Popular pharmacies, such as Rite Aid, sell an entire bottle with 100 of those same pills for $5.49 (less than 6 cents each).
In 2019, the federal government is requiring hospitals across the nation to post their standard prices on their websites. Consumer advocates and industry experts say this is an important step toward price transparency in medical billing that will encourage hospitals to offer more competitive pricing.
However, the kinks still need to be worked out. The price lists submitted on the sites are often inaccurate or misleading because patients actually pay the posted prices, as insurers negotiate lower rates for their plans. It’s still difficult to determine what the final bills will include.
“We always advocate for more information and transparency,” said Dena Mendelsohn, Senior Policy Counsel for Consumer Reports. “It’s helpful from a broader perspective to see where our money is going. If consumers find this information, it will be really eye opening. But it’s questionable whether it’s something they can act on.”
In California hospitals have been required under the Payer’s Bill of Rights to provide their a la carte price lists, known as “charge masters,” to the Office of Statewide Health Planning and Development, and to post average prices for the most common procedures for more than fifteen years. This practice simply wasn’t common knowledge. Now, more than 30 other states have similar requirements, but noncompliance penalties are still being worked out.
“Can you imagine going to the grocery store, getting the groceries you need for the week, but never knowing the price of your items until a week later when the store sends you a bill?” Seema Verma, the Medicare services agency’s administrator, said. “Sadly, that’s how health care works every day.”
Gerard Anderson, professor of health policy and management at the Johns Hopkins University Bloomberg School of Public Health, said difference prices charged at different facilities is a reflection of individualized revenue strategies. He said, “The hospital that charges a lot for the acetaminophen or aspirin may charge less for the emergency room. That’s what makes it so hard to do a comparison. It would be fine if one was always 50 percent more, but that’s not the case. In some cases, they’re 50 percent more and, in others, 10 percent less.”
Harry Dhami, health program auditor at California’s OSHPD, said there is no standard definition for the terms that hospitals use in the pricing posted, which makes it difficult for patients to determine exactly what they’re being charged for. “It leaves a lot of gray area where it’s hard to compare across facilities,” Dhami said.
Some lists also appear to include multiple prices for the same thing, which further adds to bill confusion. David Lansky, chief executive of the Pacific Business Group on Health, said “employers feel strongly that transparency is good, but posting the charge master prices on hospital websites is pretty meaningless and, of course, very hard for a typical consumer to access and understand.”