We seem to be moving to a new environment in which hospitals are being forced to post their charges to enable patients to become smarter healthcare shoppers. This has been a long time in coming. It would be unthinkable in any other industry not to offer such pricing transparency, Here is an article about this topic (see: In move toward transparency, Virginia Mason posts procedure price information online) and below is an excerpt from it:
Virginia Mason Medical Center will start posting price estimates online for its medical procedures, marking one further step toward transparency. Last year, the medical center introduced its patient cost estimator to help take the guesswork out of medical bills. Now, Virginia Mason has added to its website the estimated prices for its 100 most common outpatient surgical procedures. In the wake of health reform, health systems more and more are trying to be transparent about the costs of health care. That means helping patients factor in their insurance and deductibles when trying to figure out how much they will have to pay when they get a bill in the mail weeks later, and being more up-front about procedural costs before insurance is taken into account. One Puget Sound-area startup is even capitalizing on the demand for greater transparency and harnessing federal data to rate cost against quality for medical procedures. Additionally, Virginia Mason will provide individuals a written estimate of their out-of-pocket expenses for scheduled or planned inpatient and outpatient medical procedures.“Changes in health insurance plans often mean individuals are paying higher out-of-pocket costs for health care services,” said Steve Schaefer, vice president of finance for the health system. “Understandably, they are looking ever more closely at cost and quality, and weighing those factors in their decision-making.”
The trend toward greater transparency in hospital pricing has been historically promoted by Medicare (see: Medicare Officials Post Hospital Prices; A Step in the Right Direction). Often unwillingly, some hospitals now seem to be following suit, perhaps, in part, to gain a competitive edge in their local environments (see: Medical price transparency toolkit unveiled by American Hospital Association). This is only half of the battle, however. Healthcare consumers need to take advantage of this opportunity to shop on the basis of both cost and quality. In the past, there was little need for insured patients to take hospital prices into account because the hospitals and health insurance companies negotiated reimbursement rates that had little relationship to the hospital posted prices. The insurance companies paid most of the bill. Only the uninsured were stuck with "rack rates." All of this has now changed as a greater percentage of insured patients choose high-deductible policies that require them to shoulder more of the cost of care out-of-pocket.
There is still a great deal of "friction" to the process by which a hospital is chosen by a patient based in part on his or her insurance policy and the hospital to which a physician or surgeon has admitting privileges. Nevertheless, this initiative by Virginia Mason Medical Center is definitely a step in the right direction. I am sure that the cost-estimation tools and services offered by hospitals, both in person and on the web, will continue to grow more sophisticated. It will be interesting to see whether hospitals such as Virginia Mason will stand by the cost estimates generated for prospective patients. The use of the term "estimate" suggests that this is not always the case and I understand that complications can occur that would alter such estimates. The next step will be "cost guarantees" by hospitals for individual surgical procedures.