A slew of recent healthcare studies confirms what American patients already know: Real healthcare prices remain elusive. Last week, PatientRightsAdvocate.org sent the Department of Health and Human Services (HHS) recommendations on how it can finally deliver actual prices to consumers by taking actionable steps in its forthcoming CY 2022 OPPS Rule currently being drafted.
In 2019, the federal government required hospitals to make public their chargemasters, the wildly inflated healthcare list prices that serve as initial negotiating points between providers and payers. This month, a study published in JAMA concludes that most hospitals have not complied with this transparency requirement a year and a half after it began.
A separate federal rule that took effect at the beginning of this year requires hospitals to publish their real prices, including their discounted cash and secret negotiated rates. New research by PatientRightsAdvocate.org finds that only 86 out of 431 hospitals surveyed (20 percent) are complying with the rule. Our findings demonstrating widespread noncompliance align with those in recent studies published by Health Affairs, The Health Care Cost Institute, and the Kaiser Family Foundation. A March Wall Street Journal investigation found that many major hospital systems were preventing their price data from appearing in search engines.
Last week, the Biden administration began enforcing this price transparency rule to try to increase these poor compliance rates. The move was likely spurred by a letter sent to HHS last month by Democrat and Republican leaders of the House Energy and Commerce Committee calling for increased rule enforcement with stiffer penalties and more accountability. Unfortunately, even the standard charges published by technically compliant hospitals are of little use to patients because they are not total, bundled, all-in rates. Therefore, it's nearly impossible for ordinary consumers to know their total price before care. These price disclosures are also often confusing and difficult to access.
To truly empower patients, hospitals must post their actual, all-in prices so that consumers can shop for the best care at the best prices and enjoy financial certainty and an easy remedy if their bills don't match. In its pending CY 2022 OPPS Rule, HHS can usher in this bright future, illuminated by sunlight on prices, by following our recommendations:
These steps, actionable by Jan. 1, 2022, can finally arm healthcare consumers with the price information needed to usher in a functional, competitive healthcare marketplace while preventing rampant overcharging, price gouging, and fraud.
For a vision of this future, consider existing price transparent providers such as the Surgery Center of Oklahoma, which publishes its complete prices online in a consumer-friendly interface. Their prices are mere fractions of what major hospitals charge for the same services, and patients and employers are saving 30 to 50 percent on their healthcare costs by contracting with them.
For instance, the Surgery Center charges $15,500 for a total knee replacement, one-quarter of the $61,585 cost at a hospital in nearby Dallas. A Georgia woman was able to get her local hospital, which had quoted her $40,000 for a procedure, to match the Surgery Center's $3,600 rate, indicating how a transparent, competitive marketplace based on consumer choice will put healthcare costs in reverse.
When patients have broad access to real prices at their fingertips on their smartphones, they won't tolerate paying ten times more for the same care, just like how consumers armed with Expedia and Kayak won't pay ten times more for travel. The proliferation of high-deductible healthcare plans, where consumers directly pay their first several thousand dollars of annual healthcare costs, will only increase the desire and financial need to shop.
Patients have the right to straight-up, upfront healthcare prices. Yet as numerous recent studies confirm, hospitals aren't providing them. Widespread consumer demand and actionable federal steps articulated in the OPPS rule can finally deliver meaningful price transparency needed to revolutionize American healthcare.
Cynthia A. Fisher is a life sciences entrepreneur, founder and chair of PatientRightsAdvocate.org, and founder and former CEO of VIaCord Inc.
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The costs of health care elusive, despite transparency requirements
