Why more don’t try to shop for health care
At Rush University Medical Center on Chicago’s West Side, the median charge for a typical birth was $16,703 last year.
Three miles away, at Norwegian American Hospital, it cost about half that: $8,873.
Most patients don’t pay those charges, instead paying a sum based on rates negotiated between hospitals and health insurance companies. But even after those negotiations, stark differences often remain — disparities that can hit the wallet hard.
Though consumers have long bemoaned rising health care costs, few people shop for health care the way they might shop for a car, comparing prices. Some don’t realize a procedure can cost tens of thousands of dollars more at one hospital versus another. Others would rather rely on referrals or don’t know where to go to find information.
Hospital prices vary for a number of reasons, including differing overhead costs, market dynamics and, in some hospitals, a need to offset the costs of complex services by billing higher rates for simpler ones.
Now, the Trump administration wants to make it easier for patients to comparison shop for medical care, proposing a rule that would require hospitals to post their charges, before insurance, on their websites. The administration also is considering whether that posted information should reflect rates negotiated with insurers.
Some consumer advocates cheer the administration’s proposal as a step toward greater price transparency. But hospitals and many experts say such a move likely wouldn’t make much of a difference, pointing to existing online price comparison tools that often go unused by consumers.
“Everybody wants to try to find a path forward to increase price transparency, but it is very complex,” said Sandy Kraiss, Illinois Health and Hospital Association vice president of health policy and finance. “We just don’t see that this is the best approach to advance that.”
Consumers who want to know how much a hospital procedure will cost already have a number of options. They can call hospitals to get individual estimates, and sometimes, they can go to hospital websites.
Insurers offer many of the most comprehensive price-comparison tools. In many cases, consumers can log onto their insurance companies’ websites to compare their individual, outof-pocket costs for procedures at different hospitals.
But most consumers don’t. Nationally, only about 20 percent of Americans have tried to compare prices before getting care, according to the results of a 2016 survey by Public Agenda, a New York City-based nonprofit.
“A lot of it is member awareness,”
Hospital prices vary for a number of reasons, including differing overhead costs, market dynamics and, in some hospitals, a need to offset the costs of complex services by billing higher rates for simpler ones.
said Thomas Meier with Blue Cross and Blue Shield of Illinois. “I think a lot of the members don’t understand even what an (in-network) versus out-of-network provider is, let alone that 44 different providers would charge 44 different amounts for an MRI.”
Still, shopping for services can save cash across the health care system — for patients, for their employers and for insurance companies, which foot large portions of patients’ bills. Self-insured employers also pay much of their workers’ health care bills. Employers that aren’t self-insured may face higher rates from their insurers if their employees’ medical claims climb.
So perhaps it’s no surprise that many in health care are encouraging consumers to shop.
Blue Cross and Blue Shield of Illinois and UnitedHealthcare work with some employers to offer incentives for employees to choose lower-cost, high-quality services. With Blue Cross, for example, workers can receive checks of $25 to $500 for choosing certain providers.
“People who use our tools save 36 percent over folks that don’t use our tools,” said Katherine Bisek, a vice president for the insurer. “Higher prices don’t necessarily equate to higher quality or better outcomes.”