Patients now have more information about hospital prices, but will need patience to sort it out

There is some good news for patients: More information is now available on health-care costs, enabling consumers to better choose a provider.

On Jan. 1, the Centers for Medicare and Medicaid Services required all hospitals to post online their sticker price or “charge master” for services that they offer, information that was all but hidden from the consumer.

Hospitals are quick to point out that seldom does one pay the sticker price. But, then, why do they charge it?

These prices are often reprehensibly inflated and give hospitals enormous leverage since they are the starting point for negotiations with insurance companies and patients.

If a non-insured patient is given a 25 percent discount, then the starting price does matter.

Medicare may pay only 10 percent of the charge-master price, so even if a 25 percent discount is given, the unsuspecting patient is duped.

In addition, if you are traveling and are in an area without an in-network provider, you may well suffer the same fate as the uninsured.

Although the availability of hospital prices is good news, we still have a long way to go before this information is easily understood by the consumer.

Hospitals are only required to post the data in a “machine readable format.” If a description is present, it is often filled with patient-unfriendly abbreviations which inhibit both comprehension and searching.

In Kentucky, hospitals that list a billing code, price and definition with abbreviations include CHI Saint Joseph Health and Kentucky One Health (St. Joseph East, Jewish, St. Mary & Elizabeth and St. Joseph Hospital in Lexington).

Baptist Health Lexington, Baptist Health Louisville, and the University of Louisville make it more difficult for patients to use their information by excluding the billing code and listing listing only definitions with abbreviations and prices.

Another major problem is that a hospitalized patient’s bill will be a long list of line-item charges comprised of multiple services, drugs and treatments. A patient cannot possibly predict what these will be and sometimes there are hidden balloon charges in the mix, such as an enormous charge for adding potassium to a reasonably priced bag of saline.

Thus, I like the additional posting of full treatment comparisons such as Medicare’s DRGs (diagnostic related group).

Granted they do not tell a patient exactly what their charge will be, but will answer the important question: If you can’t tell me my exact charge, what is your usual charge for a similar condition?

I found three hospitals that posted charges grouped into DRGs —Frankfort Regional Hospital, the University of Kentucky Medical Center and Lake Cumberland Regional Hospital. Lake Cumberland Regional Hospital’s downloadable report offered DRG codes and prices without definitions. Frankfort Regional and UK had minimally abbreviated DRG definitions. These hospitals also listed the line item sticker prices. In addition, the University of Kentucky had supplementary information including room, lab and x-ray charges with minimal abbreviations.

St. Elizabeth also had a very user-friendly price page of common procedures. For example, a cervical spine MRI scan with and without contrast has a sticker price of $1,318, a far cry from a price of more than $4,000 on my relative’s procedure. For someone who is uninsured, traveling across the state to a lower-cost provider is a better deal than even 50 percent off a $4,000 sticker price.

It was obvious that the University of Kentucky Medical Center, Frankfort Regional Hospital and St. Elizabeth Healthcare went to extra efforts in their postings which indicates a commitment to the patient.

The method of posting by Norton Healthcare had major shortcomings.

As of the writing of this op-ed, a downloadable data file was not found but instead there were more than 1,500 non-searchable webpages with billing codes, prices and definitions.

Thus, finding specific charges would be difficult.

Of note is that the definitions were easily read without significant abbreviations, a format which all hospital reports should emulate.

Most hospitals have warnings regarding the interpretation of the posted data and contact numbers for patients to call for billing clarifications.

Patients certainly should do so, if they have time to “shop” for their health care.

Posting of the hospital’s sticker prices in an accessible understandable format is a social responsibility that all hospitals should willingly undertake.

The plethora of abbreviations and non-standardization of the billing codes which I encountered needs to be eliminated.

Changes in Kentucky law to allow the provision of additional information would instill further competition.

Prohibiting contractual non-disclosures of insurance contract prices would be of great benefit to consumers in choosing both an insurance plan and health-care provider.

The use of standardized codes and formats should be a first step.

Making the information more accessible and understandable to patients would be an excellent initiative for the Kentucky Hospital Association and should be a moral imperative for all health-care providers.

Kevin T. Kavanagh is a retired physician and board chairman of Health Watch USA.