The federal mandate that went into effect Jan. 1 requiring hospitals to post prices of their services online isn’t doing much good, according to the authors of an opinion piece published in the Annals of Internal Medicine.
A better solution, the Harvard-affiliated researchers said, is developing a new infrastructure to allow patients’ trusted gatekeepers to healthcare—physicians—to provide out-of-pocket costs or at least “good-faith estimates” of prices before a care plan is executed.
“Dentists already provide prices to patients—why should physicians be any different?” wrote Austin Frakt, PhD, and Ateev Mehrotra, MD, MPH. “Ohio has passed legislation that requires providers to give patients good-faith estimates before they begin nonemergency treatment. This law addresses what patients need, which is a timely estimate of their out-of-pocket costs from the source they depend on.”
Frakt and Mehrotra acknowledged such a setup would require collaboration between insurers and doctors—which could be seen as one more administrative burden for a burned-out physician workforce to take on. But health systems, insurers and private companies are already developing tools to determine out-of-pocket costs for medications; similar efforts could be undertaken for imaging studies and laboratory tests, the authors suggested.
The proposal may have complexities of its own, but Frakt and Mehrotra contend it’s better than the newly enacted rule. While that mandate requires list prices to be posted, it’s difficult for patients to discern out-of-pocket costs; sift through medical jargon, CPT codes and other items that hinder direct communication of prices; evaluate the quality of the service; and predict everything a medical visit will entail.
“Even if patients were motivated to shop for the lowest price, they typically would not shop separately for each bandage, scan, or laboratory test,” the researchers wrote. “These costs are usually incurred as part of an episode (such as a knee or hip replacement), and patients are not able to select a bandage from one hospital, an imaging service from another, and a laboratory test from a third. Patients need the bundled price for the entire episode, which chargemaster prices do not provide.”
The authors noted that every other transaction in our economy involves upfront information about costs. And while it’s impossible to account for certain services or products in emergency situations, a moral argument can be made that consumers deserve the clearest, most accurate pricing information possible.
“Price transparency ultimately is not helpful if irrelevant prices are provided,” Frakt and Mehrotra wrote. “We need to move to a system in which patients can turn to their physician for out-of-pocket prices or good-faith estimates before they receive care.”