Hos­pi­tal prices are now pub­lic

Business Day (Nigeria) - - EDITORIAL -

FROM THE day it be­came law, the Af­ford­able Care Act, bet­ter known as Oba­macare, has been a party piñata for the Repub­li­cans. They keep bash­ing it from all sides, try­ing to tear it apart. But one of its pro­vi­sions was em­braced and even bol­stered by the Trump ad­min­is­tra­tion: as of Jan­uary 1st hos­pi­tals are obliged to post on­line the stan­dard charges for all of their ser­vices.

The idea is, in the­ory, laud­able. Pa­tients, who are oth­er­wise mostly blind as to what their care will cost un­til the bill ar­rives, would shop around for lower prices. The biggest win­ners at first would be the roughly 10% of Amer­i­cans who do not have health in­sur­ance and the 43% cov­ered by cheap plans that re­quire them to pay sub­stan­tial amounts to­wards med­i­cal bills be­fore their in­sur­ance kicks in (known as high-de­ductible plans). As pa­tients flock to com­peti­tors who charge less, hos­pi­tals would cut prices to win them back—bring­ing Amer­ica’s ex­or­bi­tant prices closer to those in other rich coun­tries (see chart).

In re­al­ity, none of this is likely to hap­pen. The price lists that are be­ing pub­lished are of lit­tle prac­ti­cal use for pa­tients. Each pri­vate in­surer ne­go­ti­ates dis­counted rates with each hos­pi­tal, in con­tracts that usu­ally nei­ther side is al­lowed to make pub­lic. An anal­y­sis of pay­ments for un­com­pli­cated births in Cal­i­for­nia in 2011, for ex­am­ple, found that dis­counted prices paid by in­sur­ers were, on av­er­age, 37% of hos­pi­tals’ list prices.

Unin­sured pa­tients, who are most likely to pay the list prices, face a head­scratcher: work­ing out which of the thou­sands of items on the price lists, with de­scrip­tions like “ECHO TEE GUID TCAT ICAR/ VES­SEL STRUC­TURAL INTVN”, might ap­ply for their treat­ment. Even if they man­age to nail down the big-ticket items,

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