Bruce Japsen, Contributor | Forbes.com
As public scrutiny intensifies over price transparency in health care, a new report shows 72 percent of the nation, or 36 states, failing to improve information to consumers on what medical treatments and procedures actually cost.
The report from two business coalitions representing some of the nation’s largest employers is the latest troubling sign that most prices in health care remain a mystery to consumers, employers and patients picking up the tab for health care services. They cite national studies showing prices for identical procedures can vary more than 700 percent in some cases.
“It should be concerning to every lawmaker in the country that 18 percent of the U.S. economy is shrouded in mystery,” said Francois de Brantes, executive director of Health Care Incentives Improvement Institute and report card co-sponsor, the Catalyst for Payment Reform.
“More Americans than ever before are paying a significant percentage of health care costs and they can’t comparison shop without price information,” de Brantes said. “We’ve been all focusing so much on utilization, that we’ve ignored price almost completely. We’re now seeing a convergence of issues highlighting the criticality of price transparency, and state and federal legislators are asleep at the switch. It’s time for a wakeup call and we hope this is it. ”
The report shows only 14 states are achieving a grade of “C” or better when it comes to price transparency, while 72 percent are scoring a “D” or an “F.” The majority of states are providing information about “charges” yet those figures do not reflect what patients, consumers, employers and health plans end up paying for tests, procedures and other medical care services. And when consumers seek pricing information, it is generally only “available on request,” the study said.
“It is only fair and logical to ensure that consumers have the information they need about quality and cost to make informed decisions about where to seek care,” said Suzanne Delbanco, executive director of Catalyst for Payment Reform, a non-profit group that represents large purchasers of health care like AT&T (T), Boeing (BA), E-Bay (EBAY) and Wal-Mart Stores Inc. (WMT).
Just two states — Massachusetts and New Hampshire — received an “A” for sharing an array of price information. Both states, for example, share information about the price of services for both “inpatient and outpatient services” as well as “information for both doctors and hospitals.” In addition, they share data through a public web site or in public reports, allowing consumers to request such information before patients are admitted to a hospital.
“We know from studies that the price for an identical health care procedure performed in the same city can vary by as much as 700 percent, with no difference in quality,” de Brantes said. “When consumers shop for value, they can help rein in health care costs. But to do this, they first need timely and actionable price information.”
The employers and other businesses that are part of the institute and the Catalyst for Payment Reform are advocating for “laws and forthcoming legislation” to “provide powerful motivation to be more transparent,” Delbanco said. “We hope this report card spurs states to act to help consumers further.”