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I have watched with great interest as the U.S. Center for Medicare and Medicaid Services (CMS) has made hospital charge data available to the public, and different groups have begun reporting on it. I imagine that many of you share my core feeling about this topic (one that I have long held, and that the publication of this data changed not at all): hospital charges do not reflect the true cost of delivering care. Displaying what these institutions charge without adequate explanation and context is therefore deeply misleading.Here is one display of the data from a New York Times visualization that made me- and many hospital CEOs and CFOs- very uncomfortable:
Here’s what I’m getting at: most of us who work in the system often dismiss hospital charges as a false construct, one that isn't based in any way on what it really costs to deliver care. We view these charges through the lens of cost-shifting – the process by which hospitals inflate their charges in order to capture higher reimbursement from private payors to make up for the reimbursement shortfalls in public ones, such as Medicare and Medicaid.
Now, our display is all well and good for a hospital executive or policy wonk trying to understand how his margins are by payor, but it is not of much help to average consumers(especially those with large insurance deductibles) trying to figure out what they might be paying to receive care. Enter PricingHealthcare.com and the Healthcare Bluebook.
Check out the following two displays from these groups:
The table on the left by PricingHealthcare.com lays it out pretty clearly: here is what is what the hospital charges for an MRI of the knee, hip, or ankle without contrast; here’s the list of negotiated fees by payor, and the cash price (for patients paying out of pocket). What concerns me, though, is hidden in a footnote (keep an eye on that fine print!) that says that neither Oakwood nor insurers would disclose negotiated rates. (You don’t say!).
A quick review of the site leads me to believe that some, if not all, of the private payor data is reported by consumers: “we've made it easy for patients to enter data from their medical bills, anonymously and securely, while helping them track and analyze their bills as part of their personal health record.”
An interesting idea, but given the extensive number of contracts and the different types of care that patients require I am cautious (okay, downright skeptical) about the reliability of this information. All the same, the idea certainly has merit. The Healthcare Bluebook graph on the right shows the data in a different way, displaying the facility and professional (doctor’s) fees paid by patients and insurers for 37 colonoscopies in or around Nashville, TN. They display the “Fair” price for the service—one based on Healthcare Bluebook's recommended price for a service based on the typical fee that providers in the area accept as payment from insurance companies. I can also see from a quick look at its site that it captures private insurance information in the same manner as PricingHealthcare.com–directly from patients.
Okay, so here is the bottom line – we need to make healthcare data transparent and available to all of the stakeholders in the system. And while it is true that the payment system is complex, and not all of the data is easy to find, understand, grasp, or respond to, the day of reckoning is finally here and change can no longer be postponed. I for one am looking forward to the challenge of guiding this evolution in accurate, effective data display.