Hospital prices are now public

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,