The Fact that It Is Difficult to Get Pricing Information for Major Health Care Procedures — Demonstrates Just How Out of Control American Health Care Costs Are — a Study Published in JAMA Internal Medicine

14 February 2013

Theme — a system that benefits from sustaining public ignorance is not a societally responsible one

For example, American health care is institutionally set up to favor concealed profit-taking at multiple levels.

Citation — to a study regarding the extreme difficulty involved in getting prices for total hip replacement

Jaime A. Rosenthal, Xin Lu, and Peter Cram, Availability of Consumer Prices From US Hospitals for a Common Surgical Procedure, JAMA Internal Medicine, DOI:10.1001/jamainternmed.2013.460 (early online publication, 11 February 2013)

This research team tried to get the price of a total hip replacement from 122 randomly selected hospitals

Using Medicare data, the research team made a list of 4,058 hospitals that had done three or more hip replacements in 2008. They randomly selected two each from each state and from the District of Columbia.

To see if reputation would make a difference, they also included US News and World Report’s (2011-2012) top 20 “honor roll” hospitals.

Then, they telephoned each hospital on the combined list — between May 2011 and July 2012 — to get the total price of having a total hip replacement performed at that institution.

The researchers used a prepared script to guide the caller’s interaction with the hospitals

The caller was ostensibly telephoning on behalf of her uninsured 62-year-old grandmother, who had no other illnesses or injuries. Grandma was interested in getting the lowest, but complete price — meaning hospital plus doctor fee — for a total hip replacement. And she would be calling other hospitals to compare fees.

Yes, Grandma had been preoperatively evaluated. And the caller could provide Grandma’s medical and social histories, her plans for post-discharge care, and the International Classification of Diseases, Ninth Revision and Current Procedural Terminology codes for the required medical procedure — as well as Grandma’s estimated length of hospital stay.

The team pre-tested the script on several hospitals to make sure that it was complete and comprehensible.

They placed a limit of 5 calls to each hospital. The team assumed that after five, the hospital in question did not have access to the prices that the caller wanted.

Findings — not so good

Depressingly:

[L]ess than one-half of top-ranked hospitals and one-third of non–top-ranked hospitals were able to provide a complete price on our first or second telephone call.

Viewed from an alternative perspective, only 60% of the top-ranked hospitals and 63% of the non–top-ranked hospitals were able to provide a complete price even after multiple calls to both hospitals and affiliated physician practices.

© 2013 Jaime A. Rosenthal, Xin Lu, and Peter Cram, Availability of Consumer Prices From US Hospitals for a Common Surgical Procedure, JAMA Internal Medicine, DOI:10.1001/jamainternmed.2013.460 (early online publication, 11 February 2013) (at third paragraph under Comment) (paragraph split)

Getting cost information was more difficult than it should have been

In the researchers’ words:

Obtaining pricing information was difficult and frequently required multiple conversations with numerous staff members at each hospital as well as affiliated physician offices.

[W]e found that price estimates varied nearly 10-fold across hospitals, which is surprising considering that all hospitals were provided with standardized information about the procedure being requested.

Political blather about getting health care costs under control amounts to hot air

The researchers commented that their findings “are somewhat remarkable considering the support expressed by virtually all stakeholders for pricing transparency.”

Apparently, hospitals are not on board with the purported program:

Our calls to hospitals were often greeted by uncertainty and confusion by the hospital representatives about how to assist us.

We were frequently transferred between departments, asked to leave messages that were rarely returned, and told that prices could not be estimated without an office visit; in these ways our experiences mirrored those of analysts at the Government Accountability Office, who used similar methods.

It is sobering to compare our experience with the best practices we have come to expect from other service industries.

Ten-fold variability in pricing

The study found that prices ranged from $10,000 to over $100,000. According to the authors, Medicare pays between $10,000 and $25,000.

In consequence, the researchers hypothesized that consumers could save a bundle of money by price checking, before they undergo joint replacement.

Caveat — I think the assumption of successful price shopping (under these conditions) is naive

My experience with hospitals parallels that found by the study. But I diverge from the authors’ interpretation of consumers’ opportunity to price save, because I doubt that hospitals will willingly put their charges on paper (in the form of a contract), before the surgery takes place.

Price stabilization is more properly the function of insurers’ pressure and regulatory law.

For example, I see no reason why uninsured people should be burdened with excess profit taking by hospitals and medical providers, simply because the uninsured do not have someone to go to bat for them. It is not as if these same providers would not eagerly do the identical surgery at the insurer’s rate of reimbursement, were that prospective patient insured with them.

The moral? — The medical establishment gets away with what it does because no one is genuinely interested in controlling the rampant escalation of health care costs

When there is money to be made, public ignorance makes informed market decisions that much more difficult, which works to Greed’s advantage.

Yet, in so long as everybody who “counts” is making a buck from American health care, it is naive to think that the system is going to change.

We’re right back to the social and economic problems inspired by the Great American Plutocracy.

PeteFree.com

The Fact that It Is Difficult to Get Pricing Information for Major Health Care Procedures — Demonstrates Just How Out of Control American Health Care Costs Are — a Study Published in JAMA Internal Medicine