HOW MUCH IS THAT ASPIRIN AT THE HOSPITAL?
In the Byzantine world of medical billing, pricing not only is confusing but vastly different among Bay Area hospitals. Consumer advocates hope new government requirements to post standard price lists will put a lid on costs.
Oakland’s Highland Hospital lists its price for a single chest X-ray at $131, while over the Bay at the University of California San Francisco Medical Center, they say it’ll set you back $2,618.
An aspirin tablet? Highland wants $7 for that, but it’s $1.02 at Santa Clara Valley Medical Center and just 30 cents at Walnut Creek’s John Muir Medical Center. If that seems like a bargain, consider that Rite Aid sells a bottle with 100 of those same pills for $5.49, less than 5 and a half cents each. UCSF suggests they don’t charge for an aspirin pill at all.
Hoping to empower consumers who are shouldering more of their health care costs each year, the federal government this year is requiring hospitals across the country to post their standard price lists on their websites.
Consumer advocates and industry experts applaud the move as a step toward price transparency in the Byzantine world of medical billing that can help keep a lid on costs by pressuring hospitals to be more competitive in their prices.
But they also note that the price lists
“Can you imagine going to the grocery store, getting the groceries you need for the week, but never knowing the price of your items until a week later when the store sends you a bill?”
— Seema Verma, Centers for Medicare and Medicaid Services administrator, in a November blog post
are misleading. Few people actually pay the posted prices, as insurers negotiate lower rates for their plans. And it’s hard to tell from the à la carte price list how treatments might be combined for the final bill.
“We always advocate for more information and transparency,” said Dena Mendelsohn, a senior attorney at the West Coast office of Consumers Union, the advocacy division of Consumer Reports. “It’s helpful from a broader perspective to see where our money is going. If consumers find this information, it will be really eye opening. But it’s questionable whether it’s something they can act on.”
Asked about their posted price information, representatives of Bay Area hospitals had similar responses: While they support price transparency, their price lists don’t tell the full story because the complexity of cases, services provided, insurance coverage and charity programs determine what patients ultimately pay out of pocket.
For Californians, the price lists hospitals are posting aren’t new. Though only few people may be aware, California hospitals for 15 years have been required under the Payers’ Bill of Rights to provide their à la carte price lists, known as charge masters, to the Office of Statewide Health Planning and Development and to post their average prices for the most common procedures. More than 30 other states have similar requirements.
But the federal Centers for Medicare and Medicaid Services pushed to extend the requirement nationwide, calling health care price transparency a Trump administration priority.
“Can you imagine going to the grocery store, getting the groceries you need for the week, but never knowing the price of your items until a week later when the store sends you a bill?” Seema Verma, the Medicare services agency’s administrator, said in a November blog post. “Sadly, that’s how health care works every day.”
Most Bay Area hospitals appeared to be complying with the new federal posting rule, though for many, the price lists were so hard to find on their websites that a representative had to send a direct link or provide website navigation guidance. Noncompliance penalties apparently are in the works.
Why would hospitals list such wildly varying and mostly inflated prices for something like aspirin that anyone can buy for a pittance at the drug store?
Gerard Anderson, professor of health policy and management at the Johns Hopkins University Bloomberg School of Public Health, said it reflects different revenue strategies, charging more for some things and discounting others.
“The hospital that charges a lot for the acetaminophen or aspirin may charge less for the emergency room. That’s what makes it so hard to do a comparison,” Anderson said. “It would be fine if one was always 50 percent more, but that’s not the case. In some cases they’re 50 percent more and others 10 percent less.”
The federal Medicare agency recapped comments about the new rules in the federal register. Some critics felt the charge master price lists “would not be useful to patients and would only increase confusion, as it would not inform them of their out-ofpocket costs for a particular service.” But the federal agency defended the new rules, saying that a need for additional transparency in patients’ potential costs should not delay this incremental step.
The posted lists that include hundreds of cryptically described items can be head-spinning. If you ever need something listed as COMPNT ARTC UNI 8X3MM at Good Samaritan, for example, better have good insurance — the price is $122,007.
Harry Dhami, health program auditor at California’s Office of Statewide Health Planning and Development, said there is no standard definition for the terms hospitals use in their posted prices, such as an “emergency room level 2” admission.
“It leaves a lot of gray area where it’s hard to compare across facilities,” Dhami said.
John Muir Medical Center lists its emergency room level 2 service at $1,489.50, while San Mateo Medical Center says it’s just $235. John Muir representatives had no immediate comment, but the San Mateo center said its price may be lower because it is not a trauma center or teaching hospital.
Adding to the confusion, some lists appeared to include multiple prices for the same thing. Lucile Salter Packard Children’s Hospital lists three separate entries for a 325 mg aspirin tablet, two for $100 and a third for $1.40. A spokesperson said the actual price is closer to $1 and was unsure where the $100 price tags came from.
David Lansky, chief executive of the Pacific Business Group on Health, which represents employers in taming health care costs, said “employers feel strongly that transparency is good, but posting the charge master prices on hospital websites is pretty meaningless and, of course, very hard for a typical consumer to access and understand.”
In addition to posting their à la carte price lists, the federal agency is requiring acute-care inpatient hospitals that participate in a Medicare billing system that is based on average costs for various treatments — called a diagnosis-related group, or DRG — to post those figures as well. That appears to cover many hospitals; locally UCSF, Good Samaritan, Marin General, Kaiser, Washington, Seton, John Muir and Stanford are all posting the information. And it can be quite revealing.
For example, UCSF Medical Center’s charge master list suggests the price for “vaginal delivery” — presumably routine childbirth — is $5,497. But its DRG cost for “vaginal delivery without complicating diagnoses” — which sounds a lot like the same thing — is posted at $53,184, almost 10 times as high.
UCSF noted that the list reflects line-item charges for unique items and services, while the DRG is an average of total charges for patients with a specific diagnosis, affected by how long they stayed in the hospital and what tests and medications they needed. Also, because UCSF Medical Center is a specialty hospital, patients requiring more care are sent there, meaning potentially more line items and higher average charges.
Anderson, of Johns Hopkins, who helped develop the DRG system to encourage cost containment, said it’s more useful to consumers.
“If I’m going to have an appendectomy, it tells me it’s going to cost you X dollars,” Anderson said. “It’s very clear.”
Robin Gelburd, president of FAIR Health, a New York-based independent nonprofit that manages the nation’s largest database of privately billed health insurance claims and promotes health cost transparency, applauded the federal disclosure requirement.
“I think the fact that there’s this obligation to post is overall a positive thing in terms of the message it’s sending that consumers are entitled to information about pricing,” Gelburd said. “They have a right to understand and ask questions about health care pricing.”