NCPA - National Center for Policy Analysis

HOSPITAL PRICE LISTS ARE BEING OFFERED

March 27, 2006

Health Grades Inc. launched a service that allows consumers to research the average costs of 55 hospital procedures. At the same time, the Bush administration reportedly is preparing to publish selected prices that Medicare pays for common medical procedures. Both initiatives are part of a movement to provide consumers with information they need as they take on more responsibility for medical costs that were once paid largely by employers and insurance companies, says the Los Angeles Times.

The consumer price lists, by companies such as Health Grades, Aetna and WebMD.com:

  • Give patients more power to choose doctors and hospitals, slowing the rise of health care costs. These plans typically combine high-deductible insurance policies with tax-sheltered savings accounts meant to help families handle the extra expense.
  • Provide quality reports about hospitals and doctors to allow consumers to make cost-efficient decisions and recognize when a quoted price is out of line. For example, Health Grades informs that gastric bypass surgery costs patients without insurance $34,379 on average in California and 12 other Western states. Patients with health plans requiring a 20 percent co-pay would pay only $3,728.

And the federal Medicare price lists will:

  • Start publishing the negotiated prices for common medical procedures in six communities.
  • Require the release of hospital mortality rates for common illnesses such as heart attacks and infections; this allows senior citizens to compare hospitals.

Such reports are unlikely to spur consumers to haggle over the price of an angioplasty any day soon, experts say, but the growth of such services points to a shift in the industry. All indications are this is the way the market is moving, says John Goodman, president of the National Center for Policy Analysis in Dallas.

However, experts warn the complexity of medical procedures and the inconsistent ways hospitals and doctors calculate their rates, make pricing and quality information of little use to consumers.

Source: Daniel Yi, "Hospital Price Lists are Being Offered," Los Angles Times, March 22, 2006.

 

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