On the day before undergoing ovarian removal surgery, Lori Cook drove to a hospital in Nashville to get a written estimate for the cost of the procedure. She had already paid the surgeon’s fee of $783. But she needed to know what the hospital would charge for the operating room, nurses, medications, lab tests, and other fees. She left the billing department with a written estimate: $5,535.
This was far from trivial for an elementary school teacher and mother of two. She knew she would have to pay the full amount charged by the hospital under her insurance plan, which required her to pay $12,000 out of pocket before her insurance coverage would begin. After obtaining this information, she and her husband decided that they could budget for the surgery using a payment plan.
New Hospital Pricing Estimates: A New Pricing Tool to Help Save Money
The next day, the surgery was performed without complications. She returned home within a few hours.
Weeks later, she received a hospital bill: $61,314.
Cook knew that healthcare pricing was notoriously opaque, but receiving a bill more than 11 times the hospital’s estimate shocked her. She asked the hospital to review the bill and explain why it was so high, but they did not provide her with a breakdown of the billing codes.
“It’s an astronomical charge,” Cook said. “And that’s just not fair.”
Lori Cook of Nashville, Tennessee, is fighting a hospital bill that’s more than 11 times the hospital estimate. She believes the federal price transparency law for hospitals could help consumers avoid large bills.
A New Pricing Tool: Hospital Price Database
A searchable database was launched for free this week by a nonprofit organization that collects pricing data from nearly 6,000 hospitals across the United States. The Patient Rights Advocacy tool, or PRA, is a hospital price file research tool designed to empower patients, employers, unions, and others to compare and save on medical bills.
PRA officials said the tool meets a need and allows people to compare prices and save on procedures and medical services. The group points out that the vast majority of healthcare is non-emergency care. The idea is that consumers have time to shop and compare prices charged by different hospitals and clinics before undergoing a procedure. With 100 million Americans in medical debt, having a tool like this can help consumers shop for better prices and avoid large bills, they said.
Cynthia Fisher, founder and president of PRA, acknowledged that the data is incomplete because many hospitals have not published all pricing data as required by the federal price transparency law.
She stated that the vast majority of hospitals have not complied with the law.
In a letter sent Monday to U.S. Secretary of Health and Human Services Xavier Becerra, Fisher noted that as of July, only 36% of the largest 2,000 hospitals in the country were fully compliant with the law. She hopes the PRA database will convince the federal agency that it is time to “accelerate the enforcement” of the price transparency law.
“Every day that prices are kept from consumers, Americans are harmed by surprise bills and un justified debt,” Fisher wrote to Becerra. “Once actual prices are disclosed by all hospitals and all insurance companies at every point of care, consumers can shop and compare.”
Billing Demands: “Collectors call me every day”
If such a database had been available to Cook, she would have used it to compare prices. She likened it to shopping for a car using a Kelley Blue Book or other sites that display vehicle values by make and model.
Instead
that, Cook fought the charges the hospital imposed for the January procedure. The hospital did not provide a complete breakdown of the billing codes used for the charges. Her insurance paid part of the bill, and the hospital hired a debt collection agency to collect nearly $8,800 from Cook. She also received a separate bill for $2,700 from the anesthesiologist that shocked her.
Cook said, “Bill collectors call me every day,” when she is studying at school and during family time. It’s a new experience for her because she has always paid her bills on time and has had good credit throughout her life before the surgery.
Cook said, “People want to be responsible. They should have the ability to do so.”
Insurance Doesn’t Guarantee the Lowest Price
In recent years, several health insurance companies have provided tools to search for prices for their clients. These tools are often specifically designed for individual plans and networks of doctors and hospitals. Typically, these tools include information on members’ payment requirements, minimum out-of-pocket expenses, deductibles, and copayments.
But these tools offered by insurance companies also include average costs, not the actual billed amount, according to a paper in the Health Affairs journal. Hospitals and doctors are more accountable when their actual prices are listed instead of estimates. The authors say that consumers and employers who purchase healthcare don’t have much use for estimates.
J. Pai, an accounting and health policy and management professor at Johns Hopkins University, said that price transparency has enormous potential for patients and employers looking to monitor rising healthcare costs. But she also says that people need better incentives to shop for lower-cost services.
In a recent study, Pai found that in about half of the cases, hospitals charge cash-paying patients less than those using insurance for the same medical service. In other words, consumers with high-deductible plans would have a lower bill if they paid cash instead of using their insurance plan to cover the bill.
But consumers and employers will only know this if they shop around and ask for prices. People may not be willing to do that unless they have a financial incentive to do so, Pai said.
Pai said, “We only do comparative shopping when the financial benefit flows directly into our own pockets.”
Wide Price Variation for Knee MRI
Suzette Sonntag learned to shop for medical service prices when her son, in his twenties, fell from the tailgate of a truck and injured his knee a few years ago.
He needed an MRI to see how badly he was hurt in the knee. Since her son was uninsured at the time, Sonntag, who lives in Somerset, Wisconsin, suggested he call several hospitals and clinics to find out how much a magnetic resonance imaging scan would cost someone without insurance coverage.
Her son called eight hospitals and clinics and received prices from four of them. The prices ranged from $499 to $7,000, according to Sonntag. Her son ended up going to the cheapest imaging clinic, located in the Minneapolis-St. Paul area, and paid $499 for the MRI, which included a review of the image by a radiologist.
Sonntag said she was “just shocked” by the price difference.
Since that experience with her son, Sonntag has tried to find out prices for medical services like mammograms, skin cancer removals, and blood pressure checks with varying success.
Sonntag said paying healthcare costs has been difficult for her and her husband because they are farmers. They have to purchase their own health insurance.
On
A farm covering an area of 600 acres grows soybeans, corn, and hay. They also train and care for horses. They list the prices for training and care on a website so that customers aren’t surprised. Some look for cheaper options, while others don’t mind paying more because they are looking for more luxurious stalls with additional amenities.
She said she would like to see hospitals, doctors, and laboratories be more transparent about the prices they charge.
She stated, “It’s the most honest way.” “This is the fair way to do it.”
You can follow Ken Altucker on X, formerly Twitter, at @kalltucker, or you can email him at [email protected].
This article originally appeared on USA TODAY: Efforts to help provide prices for costly hospital services and bills in progress.
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