A push for transparency in healthcare pricing

Dan Gorenstein Mar 27, 2015

A push for transparency in healthcare pricing

Dan Gorenstein Mar 27, 2015

Usually when we shop, finding the price is the easy part. Cars, airplane tickets, burgers and beer; it’s all right there. 

But when it comes to health care, an industry we spend $3 trillion dollars a year on, prices often remain a mystery.

Some people say that genuine cost transparency would make some of the waste and price variations vanish. It’s not easy breaking open a black box that, intentionally or not, richly rewards doctors, hospitals and insurers.

Barbara Barnes has peered inside that box in a way few of us ever do. She audits hospital medical records for a living – about 20 charts a day, five days a week.

That experience has hardened her. When she plans her own medical care, she knows that the healthcare system helps her physical health — but that when it comes to her financial health, she’s on her own.

“I look at some of this and I think to myself, ‘Are you, as a physician, making the best decisions for the patients? Or, are you making the best decisions for you, and your hospital and your business?’”

It’s an uncomfortable conclusion to draw about a business that many still see as compassionate, even loving. But in an era where many of us have to shell out thousands of dollars before insurance kicks, there’s nothing kind about concealing prices.

“How did we get to this place where you ask what something costs and no one can tell you and we accept that as normal?” asks Jeanne Pinder, who launched Clearhealthcosts.com, a guide to health care prices.

She’s hoping to stop people like Barnes from getting walloped by big  sometimes financially devastating  bills that are essentially secrets until after the fact.

In her work, Pinder has found example after example of jaw-dropping price discrepancies.

“People [in San Francisco] were being asked to pay anywhere from $20 to $988 for a simple X-ray,” she says.

Pinder relies on a mix of big data, shoe-leather journalism and crowd-sourcing for price information.

To maximize her reach, she’s partnered with four large public radio stations, including WNYC in New York, WHYY in Philadelphia, KPCC in Los Angeles and KQED in San Francisco. (Disclaimer: KPCC, like Marketplace, is part of American Public Media.) 

Pinder is looking at the provider side of the ledger too. MedPage Today, which reaches some 670,000 physicians, has also agreed to work with Pinder.

That said, even with access to about 2.5 million consumers and doctors to help crowd source, Pinder says it’s beyond her scope to list every price for every procedure performed by every doctor out there.

“We don’t pretend to be exhaustive or comprehensive. It’s a sampling so that you can have an idea how big the price range is to orient yourself in the marketplace,” she says.

The effort is really just a start. Through the help of some outrageous stories, it aims to pressure doctors, hospitals and insurance companies to do more than what they do today, but there is some cause for guarded optimism. The professional group Healthcare Financial Management Association has launched a campaign for greater price transparency. The group says most hospitals do something on transparency, from the simple to the sophisticated. In Seattle, Virginia Mason Health System has built a tool that it says estimates out-of-pocket expenses based on someone’s actual insurance plan.

It’s good business, says Vice President of Finance Steve Schaefer. “In every retail experience, every consumer weighs two variables: personal cost and quality. And they will make purchasing decisions based on those two variables,” he says.

That thinking about consumer behavior is a dawning realization for many in healthcare. That may be the most powerful benefit that comes from all the attention transparency is getting; by talking about prices, we begin a conversation about value. And if you think talking about prices was hard…

There’s a lot happening in the world.  Through it all, Marketplace is here for you. 

You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible. 

Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.