You need your knee replaced and want to know how much it’s going to cost. Price information is out there, but deciphering it may not be easy.
To comply with a new federal law, San Antonio hospitals have posted the prices for services and procedures for everything from a semi-private room to surgical screws to a chest X-ray.
Under a price-transparency law that took effect on Jan. 1, the Centers for Medicare and Medicaid Services requires all hospitals operating in the United States to post online a list of their standard charges.
But the resulting documents, which can contain thousands of items, are difficult for consumers to interpret and include obscure abbreviations, billing codes, and medical terminology, with descriptions like “ANCH/SCRW BN/BN TISS/BN 5” and “BCR-ABL1 QUANT.” Additionally, the price lists, known as chargemasters, rarely reflect the final billed charges because these prices are typically starting points for payment negotiations between hospital and insurance companies and have little connection to what most patients actually pay.
“Putting a specific cost out there as to what the patient is responsible for can be problematic because that’s not how hospitals complete their billing, and in some cases, there may be additional costs,” said Awoala Banigo, senior vice president of operations and chief revenue officer at University Health System (UHS). “If a patient wants to know how much an appendectomy is going to cost, the best way to go about doing so would be to give us a call.”
The UHS chargemaster list, with more than 12,000 prices listed on 223 pages, does not clearly list the price for an appendectomy, but a 5mm harmonic scalpel that might be used in the procedure is listed twice with two different prices: “Harmonic scalpel 5MM” at $860 and “Harmonic scalpel 5MM..” at $360. There is no additional description to account for the price difference or information about how or whether equipment costs are factored into the bill.
“Chargemasters are created to itemize every single item that is in a hospital or hospital system, and the dollars are basically cost plus a markup based on historical information,” Banigo said.
But when a person comes in for a procedure, he said, “they could have complications, they could incur more costs because they stay longer than expected, and the price may also vary based on labs, services, and how long the procedure takes.”
To give an overall view of what a patient’s direct cost is, some San Antonio hospitals are also posting prices for what are known as diagnostic related groups to give patients an overall picture of the total cost of care. The groupings aim to bundle services relevant to a specific treatment or diagnosis so the patient receives one bill instead of an individually itemized receipt.
To treat a cardiac arrest at the Children’s Hospital of San Antonio, for example, patients will spend more than $34,000 to cover the cost of services, according to the hospital’s price list.
Christus Health System provides consumers with a separate price list for individual services, but the procedures are listed as numeric codes.
“We understood [our list] would not be entirely helpful to consumers; it is meant to satisfy a government requirement and does not constitute the entirety of our transparency efforts,” said Christus Santa Rosa spokesman Steven Alford, noting the hospital system published diagnostic-related group charges to be more consumer-friendly. “But even that document is limited, because no two people are the same. They may require different treatments or medications or specialists. Each treatment is unique.”
When the Rivard Report inquired about the cost of a bone marrow biopsy, a Christus Santa Rosa employee was unable to provide a list price, explaining that price estimates typically are provided as part of a larger conversation about total cost of care, which factors in patients’ income and whether they have health insurance. When the employee was asked for the billing code associated with a given procedure, the provided code was not on the price list.
Baptist Health System posts both individual itemized price lists and the diagnostic-related group charges. Patti Tanner, communications director with Tenet Healthcare, the hospital’s parent company, said in an email that “when looking at the charges posted to [the] website, it is important to know that the charges posted are a reference price and not the amount that patients or insurers actually pay.”
While the approximate sticker price for “renal failure w MCC” is listed at $68,100, that price does not “reflect what insurance companies pay for hospital care provided to insured patients,” which are either negotiated by the insurance company, set by the federal government for Medicare, or set by state governments for Medicaid, Tanner said.
However, consumers can compare Baptist Health System’s price with “renal failure w MCC” at Christus Santa Rosa, where it is listed for just over $39,000.
That said, neither hospital system’s list explains what procedures, medication, or services are included in the posted cost.
While area hospitals acknowledge their published prices do little to help shine a light on the cost of care for individual patients, those who follow the health care industry say there is value in making process public.
Caitlin Donovan, director of outreach and public affairs at the National Patient Advocate Foundation, said the price lists “will be very helpful for researchers, journalists, and advocates who want to look at how hospitals price their services and who want to compare systemic pricing around the country.”
Unfortunately for consumers, publishing the chargemaster does not actually give patients the information they need.
“It bears no real relationship to what most patients will actually pay out of pocket for their care,” Donovan said. “[And]it goes back to an idea that if we place enough pressure on patients to act as consumers in an open marketplace, they will magically fix everything that’s wrong with the system itself.
“In reality, health care is anything but an open marketplace, and patients not only don’t know the price ahead of time, they often don’t even know the service ahead of time.”
Knowing that consumers may struggle to understand the chargemaster lists, some hospitals are working to get more accurate cost estimates for patients. UHS is working to develop algorithms in its new electronic medical records system that will help its hospitals determine the true cost for covering their patient’s health care needs by finding patterns and commonalities amid the intricacies of individualized treatment plans.
“Right now, I can’t come out and tell a patient it’s going to cost you X amount of dollars for all the labs and scans that will be done in a day,” Banigo said. “By using historical data to figure out the usual cost for services, we are hoping to build into our technology ways to provide more useful patient estimates.”