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A federal mandate requiring hospitals to be more clear in what they charge their patients hasn't worked out as planned, but was a good first effort, those in the industry say.

Hospitals across the nation on Jan. 1 were required to start publishing online their standard prices for prescription drugs, supplies, and thousands of services and procedures ranging from childbirth to transplants.

The U.S. Department of Health and Human Services and its Centers for Medicare and Medicaid Services tout the requirement as one step toward making hospital prices more transparent to consumers.

But the price lists -- or chargemasters -- don't do much good because they're not a reflection of what a patient actually pays, said Keith Lind, a senior policy adviser for the Public Policy Institute of AARP, formerly known as the American Association of Retired Persons.

"The idea of price transparency makes sense, but it also has to be meaningful to consumers," he said. "The bottom line is, this is a nice idea but it's not working."

The chargemasters' codes and descriptions, heavy in hospital and clinician jargon, are unique to each hospital and aren't easily comparable.

Lind likened the chargemasters posted by hospitals to a price tag on a new car that includes the cost of every part without giving a total price. "Transparency is a great idea in theory, but it's important to pair that with quality information," he said. "The price, in a vacuum, can be not just confusing but misleading. We've seen polls where people think the higher price is the higher quality of service, but sometimes the lower price is the better quality."

In Arkansas, the price lists are more easily found on some hospitals' websites than they are on others'. The hospitals offer their own caveats about the information they've posted and encourage patients to call patient-care representatives for better estimates.

The University of Arkansas for Medical Sciences website, under a heading for patients, offers two lists that can be downloaded as spreadsheets.

One lists the prices of some 500 prescription drugs and some 9,000 items, ranging from bandages to plates, rods and screws used in various surgeries and procedures. The second list has the prices of some 700 procedures, one involving the trachea at an "average charge" of $310,917.

UAMS had this disclaimer: "These prices represent UAMS's standard charges and do not necessarily represent the patient's out-of-pocket expense. The actual patient responsibility can vary significantly due to a variety of reasons, including patient insurance benefits or financial assistance."

"What we put online is the requirement set by law," a UAMS spokesman said. "Those are the procedures as listed by our hospital. I think it needs to be easier for the consumer, but I don't know whether that's on lawmakers' end or elsewhere."

In a speech Tuesday night, Seema Verma, administrator of the Centers for Medicare and Medicaid Services, or CMS, said transparency will help consumers and lead to lower prices because of competition.

"Simply put, hidden pricing means health care providers don't have to compete on price," Verma said at a conference of Centers for Medicare and Medicaid Services administrators in Baltimore. "We demand to know the cost of virtually everything we buy. Why shouldn't we demand price transparency from the health care system?"

According to a transcript of her speech posted on the Centers for Medicare and Medicaid Services website, Verma said requiring hospitals to publish their standard charges is a good first step.

"Now, we recognize that this information doesn't usually reflect the negotiated price that a person may pay," she said. "But there's no reason that hospitals have to wait on the government. They can go above and beyond this basic requirement, as many already have ... and they should be applauded. Hopefully, they are seeing that providing patients pricing information is a marketing opportunity, not a competitive disadvantage."

The website for Baptist Health has a list for "hospital charges" under four categories:

• Average "diagnosis-related group," which lists about 600 items on 13 pages, starting with a heart transplant at $789,266.

• Medications, listing 172 pages of about 40 drugs on each page, starting with a $2.35 piece of nicotine gum.

• Procedures, listing 233 pages of 30 items on each page.

• Supplies, listing 2,610 pages of about 40 items each.

"Baptist Health provides a list of charges, which includes charges for medications, procedures, supplies, and more," the health system says on its website. "The total cost (patient responsibility) may vary, depending on insurance benefits. Insurance benefit information is provided by your insurance company.

"The hospital charges do not include charges that you may incur from other members of your healthcare team that participate in your care. These charges may include your own physician or other physicians, such as a radiologist, cardiologist, anesthesiologist, surgeon or pathologist."

Baptist Health also lists financial counselors at its facilities in Little Rock, North Little Rock, Arkadelphia, Conway, Heber Springs, Malvern and Stuttgart. Help also is available by email, at priceestimates@baptist-health.org.

Bo Ryall, president and chief executive officer of the Arkansas Hospital Association, said hospitals had two concerns: the format required by the Centers for Medicare and Medicaid Services and the actual usefulness of the information. "It's detailed, it's complex," Ryall said. "Consumers want to know their out-of-pocket costs, not what the procedure costs, and a lot of that will depend on a consumer's insurance plan."

In Jonesboro, St. Bernards Medical Center offers a Web page of its average prices for a number of procedures, along with a cost comparison with other hospitals in its market.

For example, the hospital lists its price of $8,626 for "Cesarean Section Without Complications" and an average price of $22,998 for the same procedure at other hospitals in its market. Other average prices for certain procedures are divided among inpatient, outpatient and "self-pay/cash" price.

Charges for some 9,200 procedures, drugs and supplies can be downloaded from the hospital's website.

Like other hospitals, St. Bernards suggests that patients use the prices as a "starting point" to get an estimate of their out-of-pocket costs. It provides patients with a contact and phone number to get a better estimate for the cost of care.

CHI-St. Vincent offers this caveat: "Procedures vary: Keep in mind that procedure costs can vary. For example, when considering a gall bladder operation, for one person this may be very straight-forward while another person can have unforeseen complications that will impact the cost."

Lind, of the AARP, said the Centers for Medicare and Medicaid Services about six years ago posted Medicare rates and the expected out-of-pocket expenses for the top 100 procedures in the United States. The agency likely could do something similar, he said. "CMS took that data and put it into an intelligible format," he said. "I don't know why they now chose to do it this way, but it has turned out to be meaningless."

Lind said consumers with insurance should check with those insurance companies to get a better idea of their likely out-of-pocket costs. "If you don't have insurance, your best bet is to call the provider or hospital," he said.

Lind said about a third of medical procedures "are really not shoppable."

"You don't just browse around for an appendectomy or, if you have a car accident, you're certainly not going to be able to shop around," he said. "If it's a nonelective procedure, those lists probably aren't going to have much of an impact."

Business on 02/02/2019

Print Headline: Hospitals' lists of costs unhelpful, advisers say, but call efforts step in right direction

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  • Popsmith
    February 2, 2019 at 11:05 a.m.

    It's amazing the prices that hospitals and physicians charge, then settle for much less with the insurance companies. I get the feeling that they jack up their prices so that our insurnace companies think they are getting a bargain.
    The VA is a good source for the government to get a real idea of what medicine costs. And more real if the VA were allowed to negociate drug prices.

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