Sunday, March 19, 2023 | 2 a.m.
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Imagine receiving a bill for $10,000. It’s from your local hospital, where you had a minor procedure. But you have no idea why it’s so high, or how you’re going to pay.
If you’ve ever had an experience like this, you’re not alone. In 2020, a California couple was billed $80,000 for their twins’ stay in intensive care. In 2022, a South Carolina hospital charged a woman more than $5,000 for a breast biopsy, after refusing to give her a price estimate in advance. And that was just her share of the $18,000 the hospital billed.
It’s become so common for patients to receive shockingly high post-care hospital bills that Kaiser Health News started a “bill of the month” feature to showcase the worst offenders. In many cases, patients tried to figure out their costs before getting care but were told the information wasn’t available.
This is an absurd, anti-competitive, anti-patient way to run a health care system. And it’s among the reasons why the Centers for Medicare and Medicaid Services (CMS) adopted new hospital price transparency regulations more than two years ago. Since the beginning of 2021, every hospital in the country has been required to provide a clear, consumer-friendly online price list of the services they provide.
Yet a study published in January in the Journal of General Internal Medicine found that just 19% of hospitals are in full compliance with federal price transparency rules.
CMS has issued warnings to hundreds of hospitals that they’re falling short of their obligations. But so far, it’s fined just two for noncompliance.
Transparent prices give consumers the information they need to make informed purchasing decisions that balance quality and cost. Without that information, they can’t use the forces of competition to discipline hospitals into providing better care at lower cost.
Imagine what buying gas would be like if service stations didn’t clearly post their prices. Dedicated comparison shoppers with time to spare might find good deals by driving around. But many of us would end up overpaying.
Or envision trying to buy an apple at the grocery store without knowing the cost until after you’ve eaten the food. Maybe you’d make a choice based on quality or ripeness, or whether the apple was labeled organic or not. But you’d still have no idea what kind of value you were getting for your money until it was too late to do anything about it.
There’s no reason that choosing medical treatment should be any less transparent than buying gas or groceries. Yet hospitals are choosing to keep patients uninformed, even after being ordered to open up.
These opaque pricing practices are robbing consumers of billions of dollars. A Rand Corporation study estimated that improving price transparency could reduce U.S. health spending by as much as $26.6 billion a year.
CMS’s price transparency rules are designed to help us collect those billions in potential savings. But they’ll remain elusive as long as hospitals continue to flout the law.
Americans have a right to know what they’re being charged — long before that bill turns up in the mail.
Sally Pipes is president, CEO and Thomas W. Smith Fellow in Health Care Policy at the Pacific Research Institute.
