Re­sult of price trans­parency ef­fort ‘doesn’t add a lot of value for the con­sumer’

Modern Healthcare - - News - By Har­ris Meyer

PRICE TRANS­PARENCY stum­bled out of the gate as hos­pi­tals com­plied with a new CMS re­quire­ment to pub­lish their lengthy list of re­tail charges for in­di­vid­ual ser­vices and di­ag­no­sis-re­lated groups in on­line spread­sheets by Jan. 1.

Some hos­pi­tals, such as North­west­ern Memo­rial in Chicago, posted a link to their charges right on their home pages. Most oth­ers, such as HCA’s Aven­tura Hospi­tal in Florida, posted the data deeper in­side their web­sites, re­quir­ing a search and mul­ti­ple clicks. One sys­tem, Mary­land-based MedS­tar Health, said it won’t post the in­for­ma­tion un­til mid-Jan­uary be­cause it’s still work­ing to en­sure ac­cu­racy and clar­ity.

In the case of Cal­i­for­nia’s Sut­ter Health, the in­for­ma­tion ap­peared on the sys­tem’s web­site as a blob of in­com­pre­hen­si­ble script. A Sut­ter spokes­woman said the data was pub­lished in the .JSON for­mat, which she called “a ma­chine-read­able for­mat that com­plies with the rule.”

That drew crit­i­cism from a con­sumer ad­vo­cate. “If Sut­ter thinks they’re abid­ing by the let­ter of the law, they cer­tainly aren’t abid­ing by the spirit,” said An­thony Wright, ex­ec­u­tive direc­tor of Health Ac­cess.

Even when the charge­mas­ter data were pub­lished promi­nently and clearly, hospi­tal ex­ec­u­tives and con­sumer ad­vo­cates say the in­for­ma­tion is use­less or even mis­lead­ing to the gen­eral pub­lic.

“The un­for­tu­nate thing is that for most con­sumers, be­cause it’s stan­dard charges not re­lated to their cov­er­age, it’s not that help­ful,” said Rick Gundling, se­nior vice pres­i­dent of the Health­care Fi­nan­cial Man­age­ment As­so­ci­a­tion. “It was an ex­er­cise that doesn’t add a lot of value for the con­sumer.”

CMS Ad­min­is­tra­tor Seema Verma said pub­lish­ing charge­mas­ter rates is “an im­por­tant first step” and that her agency is work­ing to im­prove the rule, though she didn’t say how or when. “Hos­pi­tals don’t have to wait for us to go fur­ther in help­ing their pa­tients un­der­stand what care will cost,” she said.

Mean­while, of­fi­cials at hos­pi­tals that have in­vested in on­line tools al­low­ing pa­tients to get re­li­able es­ti­mates of how much they would pay out of pocket for var­i­ous ser­vices hoped pub­lic­ity about the new sticker prices would draw at­ten­tion to their more con­sumer-friendly trans­paren- cy ef­forts. These in­clude Bay­lor Scott & White Health in Texas, St. Clair Hospi­tal in Pitts­burgh, and El Camino Hospi­tal in Moun­tain View, Calif.

In ex­plain­ing the CMS-re­quired price data on their web­sites, those hospi­tal sys­tems en­cour­aged con­sumers to use their per­son­al­ized cost es­ti­ma­tors for cal­cu­lat­ing out-of-pocket prices. The es­ti­mates are based on in­di­vid­ual con­sumers’ health plan ben­e­fits and de­ductible sta­tus.

“It’s shin­ing a light on some­thing we’re ex­cited to al­ready have worked on,” said Julie Smith, a spokes­woman at Bay­lor Scott & White. “We think our tool is some­thing pa­tients will find more use­ful.”

Last Au­gust, the CMS fi­nal­ized the rule re­quir­ing hos­pi­tals to pub­lish a list of their stan­dard charges in a ma­chine-read­able for­mat and to up­date the in­for­ma­tion at least once a year, in line with a pro­vi­sion of the Af­ford­able Care Act that was never en­forced. There cur­rently are no penal­ties for non­com­pli­ance, though the agency is con­sid­er­ing how to en­force the rule.

The mea­sure is part of a broader ini­tia­tive by HHS Sec­re­tary Alex Azar and Verma to fos­ter price trans­parency for med­i­cal ser­vices, prescription drugs and health plans.

“We need to do some­thing about ris­ing costs, and a key pil­lar is to em­power pa­tients with the in­for­ma­tion they need to drive cost and qual­ity,” Verma wrote in a Novem­ber blog.

But there was broad agree­ment that post­ing charge­mas­ter prices and av­er­age DRG costs is not go­ing to achieve that goal, though the CMS rule sends a di­rec­tional sig­nal for in­dus­try groups. The re­tail price spread­sheets hos­pi­tals posted in­cluded charges for thou­sands of ser­vices, which typ­i­cally listed a pro­ce­dure code and an of­ten-cryptic de­scrip­tion of the ser­vice. There usu­ally were mul­ti­ple prices for sim­i­lar-sound­ing ser­vices.

“You have to start some­where on trans­parency, but these charges are not in­dica­tive of what any­one re­ally pays for hospi­tal ser­vices other than Saudi Ara­bian kings,” said Niall Bren­nan, CEO of the Health Care Cost In­sti­tute, whose web­site of­fers price in­for­ma­tion for hun­dreds of health­care ser­vices.

“And do we re­ally ex­pect con­sumers to go to the web­sites of three or five hos­pi­tals in their area to com­pare the made-up num­bers known as hospi­tal charges?” he con­tin­ued. “How will that help them fig­ure out the most ef­fi­cient place to get care?”

Many hos­pi­tals ac­knowl­edged these lim­i­ta­tions in their web­site pref­aces to the charge­mas­ter spread­sheets. They also tried to pro­vide con­text by link­ing to their poli­cies and guid­ances on fi­nan­cial as­sis­tance, how to avoid sur­prise out-of-net­work bills, and how to con­tact the hospi­tal to get a more spe­cific price es­ti­mate, Gundling said.

“Hospi­tal charge data is not rep­re­sen­ta­tive of a pa­tient’s ex­pected out-of­pocket costs,” North­west­ern Memo­rial Hospi­tal wrote. “Be­cause each pa­tient’s case is dif­fer­ent based on spe­cific med­i­cal con­di­tions, the ac­tual amount owed by a pa­tient will de­pend on that pa­tient’s in­sur­ance cov­er­age … In the vast ma­jor­ity of cases, how­ever, hos­pi­tals are re­im­bursed by in­sur­ance com­pa­nies and Medi­care/Med­i­caid at a rate that is con­sid­er­ably less than the amount charged.”

Some hospi­tal lead­ers were im­pa­tient with the CMS rule be­cause they’ve al­ready moved to more ad­vanced price trans­parency mod­els.

For in­stance, over the past decade Pomerene Memo­rial Hospi­tal in Mill- ers­burg, Ohio, in the heart of Amish coun­try, has de­vel­oped bun­dled prices for more than 300 ser­vices. That was driven by the Amish com­mu­nity’s desire to shop for the best deal and pay in cash at the time of ser­vice.

Do­ing that has forced Pomerene to move ahead of most hos­pi­tals in its abil­ity to cal­cu­late the in­put costs of sup­plies and ser­vices and come up with a set price.

Tony Sny­der, CEO of the 55-bed hospi­tal, said giv­ing con­sumers a pack­age price for a set of ser­vices, such as child­birth or an or­tho­pe­dic surgery, is key to true price trans­parency.

While Pomerene com­plied with the CMS rule and posted its charge­mas­ter prices, “the Amish know that’s not the pric­ing they’re go­ing to pay,” Sny­der said. “I don’t know how any­one will be able to

 use that to shop for the best price.”

Mod­ern Health­care was able to re­pur­pose Sut­ter Health’s posted charge­mas­ter data, above, into search­able and print­able PDFs in un­der two hours. The re­sults are at ModernHealth­ charge­mas­ter.

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