More than four years after she raised concerns about the difficulty in discerning clear pricing information for hospital services, we expect Gov.-elect Maura Healey won’t be too happy with a recent study that indicates calculating those costs remains a perplexing process.
Finding information for health-care procedures on Massachusetts hospital websites can be a “circuitous or frustrating process,” despite a 2019 federal law requiring hospitals to make all prices available online in a consumer-friendly format, according to a Pioneer Institute report.
The conservative fiscal watchdog studied a sample of 19 hospitals in Massachusetts to gauge compliance with the Public Health Service Act, which took effect in January 2021 after the adoption of regulations by the federal Centers for Medicare and Medicaid Services. Researchers said the hospitals examined were “of all sizes in urban, suburban, and rural areas across the state.”
In addition to finding “great variations in prices for several common procedures,” researchers determined that discounted cash price information — the rate a hospital would charge individuals who pay cash — was unavailable for 37% of the hospitals in the study.
“Even among hospitals that post some discounted cash prices, there are varying rates of compliance with posting prices of all the procedures for which it is mandated,” the Pioneer health report said. “Compliance rates ranged from a low of 60 percent to a high of 97 percent.”
Researchers found price variations ranging from nearly 100% for an abdominal ultrasound to over 300% for an MRI of a leg joint. Other variations cited in the report include the price of a mammography of both breasts, which ranged from a high of $962 at Lahey Hospital & Medical Center in Burlington to a low of $392 at South Shore Hospital in Weymouth.
“These disparities portray a market dominated by certain systems that are able to maintain prices above competitive norms,” the report said. “This is why provider price transparency is crucial information to which consumers, employers, benefits managers, and insurers should have ready access.”
That’s been a longstanding complaint of smaller, non-aligned suburban and rural hospitals, which historically have received lower reimbursements from insurers than larger Boston-based hospitals for the same procedures with similar outcomes.
The report, released on Nov. 17, includes several recommendations, including putting one administrator in charge of price transparency at each hospital, stepped-up enforcement of federal pricing disclosure rules, and guidance from the federal government about ways to make pricing websites more consumer -friendly.
At the state level, the report suggests creating incentives to improve hospital compliance rates.
“Lack of healthcare price information may not be bothersome to some consumers because they have good healthcare insurance and therefore believe the price to be unimportant,” the report stated.
“This is a mistake, however, because we pay all for rising healthcare costs directly or indirectly through higher insurance premiums. In many cases, however, the lack of price transparency does present problems because of health insurance with high deductibles or situations where consumers are underinsured or uninsured.”
That last statement should strike a chord with Healey, our outgoing attorney general and soon-to-be governor.
Acting as the state’s chief law enforcement officer back in October of 2018, she told the Health Policy Commission that it’s “often nearly impossible” for patients to get price information before obtaining services.
That’s particularly concerning due to the increased enrollment in high-deductible insurance plans.
Much like the Pioneer Institute’s report, Healey at the time cited studies indicating widely disparate pricing, where the same service may cost $1,000 at one hospital and $300 at another.
The system’s complexity, she said, is underscored by another study that found seven employees involved in billing activities for every 10 doctors.
Healey advised the HPC that reducing financial and administrative complexity in health care and increasing price transparency should be goals in the continuing effort the slow cost increases that are consistently a big concern for individuals, families, businesses and government.
We don’t know where the problematic cost of hospital services ranks on Healey’s priority list as she becomes governor in January.
It’s obvious that given the often-confusing nature of our state’s and nation’s health-care systems, finding a workable solution to competing cost factors will take more patience and perseverance than spent to date.
But since health-care costs account for about 40% of the state’s annual budget, it’s a subject Healey can’t ignore.