Here’s an anecdote from one of our ClearHealthCosts community members, who spent $3,200 on an MRI:
“I paid the whole thing and then found out I could have had it done for half the price only blocks away. My first foray into individual insurance — and it sucked.”
That’s someone who learned the hard way that prices can vary wildly in health care. An MRI: $300 or $6,221? A cardio stress test: $100 or $2,500? It’s your money, and your health, and you have a right to know.
Our mission at ClearHealthCosts.com has been to expose pricing disparities as people shop for health care. But back in 2011, when I decided to build a website that would reveal what stuff actually costs in the health care marketplace, people said it couldn’t be done:
“Powerful forces will put you out of business.”
“Nobody cares what things cost in health care.”
“The Affordable Care Act will make it all irrelevant.”
They were wrong.
Three years later, a consumer revolution is taking place. People are demanding control over health expenses and treatments, trying to manage out-of-pocket costs and confusing bills, and seeking the care they need at prices they can afford.
The Affordable Care Act is in place, the Supreme Court has ruled, the botched rollout of HealthCare.gov is no longer sucking up attention — so the political chatter has died down. People are now focused on the practical next steps as they cope with real bills in real time.
Innovating for Value in Health Care
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A collaboration of the editors of Harvard Business Review and the New England Journal of Medicine, exploring best practices for improving patient outcomes while reducing costs.
At ClearHealthCosts.com, we’re partnering with KQED public radio in San Francisco and with KPCC/Southern California Public Radio in Los Angeles on PriceCheck — a crowdsourcing project to create a large database of cash and self-pay prices that are specific to named providers.
The initiative, funded by the John S. and James L. Knight Foundation, allows our community members to survey the cash prices we have collected and invites them to add their own information — total charged price, what their insurance paid, and how much they spent out-of-pocket — as well as descriptions of their experiences. With this project, we are giving people a voice and a sense of agency as they confront the problem of price disparity — and we’re enabling them to join with each other and with us to find a solution.
Here’s what some of our community members told us on PriceCheck:
“I was told a procedure would be $1,850. I have a $7,500 deductible. So I talked to the office [manager], who said if I paid up front and agreed not to report the procedure to Blue Cross, that it would be $580.”
“I have insurance, but it’s not very good …. My daughter will need an MRI again next year, and thanks to your organization and what I learned on NPR, I will shop around next year and maybe just pay cash.”
“Worked with billing for several weeks to work down price. Goes to show the price isn’t the price….” [billed at $1,407, paid $900]
People who thought they had good insurance tell us stories of wildly inflated bills and ruinous coinsurance for things like a simple gall-bladder operation. People are putting away their insurance cards and paying cash to get a lower price. They have bills to share and stories to tell, and they want to help others who face the same challenges.
A Solution for the Present — and for the People
At ClearHealth Costs, we’re journalists who believe that sunlight is the best disinfectant. Here’s the way our process works:
We collect cash or self-pay rates from providers on 30 to 35 “shoppable” procedures, such as MRIs, cardio stress tests, and walk-in clinic visits. Our survey methodology elicits consistent apples-to-apples prices every time. We tell providers who we are and what we’re doing, and we ask them for their cash or self-pay prices. If they have questions, we point them to the site. Most tell us the prices; some, though, say they do not give prices over the phone, or give prices only to patients.
Once we have the prices, we juxtapose them with corresponding Medicare reimbursement rates, where applicable, because they are the closest thing to a benchmark price. We’ve also found a growing number of providers that list their prices online. Some providers now come to us and ask to be in our system. One trade group is even discussing the possibility of surveying its members about prices to add to our database.
Why don’t we use “average” prices? Because you can’t act on those numbers. No one goes to a provider and says, “The average price for a colonoscopy in New York is $1,500, and that’s what I’d like to pay.” Plus, average prices vary greatly, depending on the underlying data.
What about “charge master” prices? You know, those lists of every billable service that a provider offers? We don’t use them because they’re notional or aspirational. And most providers have a cash rate that’s very different from the charge master price. We prefer to gather data that people can actually use.
We have to get health care prices under control. Many solutions have been suggested: price fixing, reference pricing, a single-payer system (which still seems politically unpalatable to much of the nation). The debates will rage on.
What hasn’t been tried is full-on transparency. In the spirit of the Sixties, it’s power to the people. My friend Dave deBronkart — known as ePatient Dave, the patient engagement advocate — and I talk often about the civil rights movement, the rise of feminism, and the experience of fighting for changes that were hard but inevitable, because they were so undeniably right.
People should always ask about prices, and providers and payers should always reveal them. All of them. Charged prices, paid prices, coinsurance. Up front, before the point of service, for anything shoppable. Yes, it’s hard, but do it anyway. Then that $6,221 MRI can be compared with the one for $300.
If you want the $6,221 MRI, you should have it — but you should pay for it, not me, not my employer, not my government. If you want the $300 test, it’s yours. If you want to buy your prescription for $150, go ahead. But you should also know that if you walk two blocks, you can get it for $17. (Yes, these are real numbers.) And you shouldn’t need to be a detective to discover this.
Once cost transparency is a matter of course, quality metrics that are clear and useful will come to the fore. And as the non-emergency, modest-ticket marketplace is transformed, people will also start to approach the emergency, big-ticket items as cost-conscious consumers.
Transparent markets benefit consumers, as providers compete to win business and healthy market forces produce benefits for suppliers. Witness how the markets for airline tickets, cars, and real estate were transformed by technology and transparency. Like it or not, health care is close behind.
Those at the forefront will be rewarded: Transparency shines a radiant light on good services at reasonable prices. Those who offer only partial transparency will do so at their peril. The internet hates when people lie and keep secrets.
People are shopping for health care. It’s time to acknowledge that — and celebrate it.