You would think that making the prices charged by hospitals and doctors available to their patients would be a no-brainer. After all, we’ve become accustomed to knowing the price we pay for cars, carrots, comic books, and almost everything else we buy. Why not knee surgery or appendectomies?
The medical establishment, it seems, isn’t keen on letting the public in on what health practitioners charge for their services. Despite lots of talk about price transparency from government officials, including the Trump administration, the actions of hospitals and physicians speak otherwise.
“Price secrecy is a calculated strategy,” says Jeanne Pinder, founder and CEO of ClearHealthCosts, a digital start–up that works with news outlets to disclose the costs of medical care. “All that money collected from overpriced care and mysterious bills goes into lobbying and behind the scenes pressure. They lobby lawmakers and regulators to protect the current system and to skew it even further to their benefit.”
That’s what has happened in Ohio where the hospital industry and its lobbyists have succeeded in killing two laws passed by the state legislature, the first in 2015 and the second this summer, that would have allowed patients to know the prices of the medical procedures and services they were about to receive.
The 2015 law would have required hospitals and other health care providers to give patients an estimate of their costs no later than the same day a procedure or medical intervention would take place. The hospitals objected. The governor’s office never wrote rules to implement the law, and hospitals and other health care groups sued to prevent implementation.
The law was passed as part of the worker’s compensation budget bill, and the medical industry argued that it violated the state prohibition on including multiple subjects in one bill. A lower court judge sided with the hospitals. The matter is now before the Ohio Court of Appeals and likely to go to the state supreme court.
This year Jim Butler, speaker pro tempore of the Ohio House of Representatives and champion of the 2015 law, succeeded in getting a second bill passed that he said took into account the health industry objections. He called it a “much better version of transparency.” Health care providers would not give price estimates. Instead, they would have to notify a patient’s insurance company within 24 hours of scheduling the procedure and disclose what the service would cost. The carrier would then give patients an estimate of those costs.
Patients would not have to ask for the information. Butler said that requiring patients to ask for a price estimate is not satisfactory since most people won’t do it.
In 2012 Massachusetts passed a law requiring medical providers to disclose to patients within two business days the amount their insurer would pay for a procedure or the hospital list price if a patient was uninsured – but only if the patient asked. It turned out very few did, even though the prices for services like MRIs vary widely.
Butler’s latest attempt at price transparency has failed, too.
Using his line-item veto power, Ohio Gov. Mike DeWine nixed Butler’s second attempt at medical price transparency, saying his veto was “in the public interest” and citing efforts by the federal government to address transparency. It’s important the state not put “duplicative or burdensome regulations on health care providers,” he said.
What’s really at stake for the hospitals?
Armed with price information, patients not in the midst of an emergency may be able to find cheaper providers for their care.
With medical prices rising and insurers demanding larger deductibles and more expensive coinsurance, patients may be looking for all the help they can get. A study by insurance giant United Health Group found that hospital prices for inpatient care increased by 19 percent and physician prices by 10 percent between 2013 and 2017.
“Hospitals certainly don’t want transparency because it will create competition,” Butler told me.
I’ve been covering consumer issues for decades. Most businesses I’ve written about have fought government regulation. Instead, they’ve pushed for more information and price disclosure to solve whatever consumer abuse was taking place.
As we see in Ohio, sellers in the health care marketplace seem to want neither.