Americans are prolific shoppers, constantly on the lookout for the best price for top-quality products and services. If you are searching for a new television, it’s easy to find prices and statistics transparently and prominently displayed at just about every store.
Yet when it comes to maintaining our health, very few of us ever know price or quality before receiving a health care service. This is true whether it’s a simple visit to the doctor, a cancer screening, or a knee replacement.
One reason health care costs continue to skyrocket is that the prices and quality of care are largely hidden from patients. That means health care providers don’t compete on cost or quality.
This is unacceptable. By 2026, health care spending is projected to consume 20 percent of the economy. Doing more of the same won’t fix this problem, so we must move our health care system onto a different trajectory.
Americans need access to information to make the best health care decisions for themselves and their families. This is why transparency in health care price and quality is a top priority for the Centers for Medicare and Medicaid Services.
If people don’t know the cost or quality of health care services, they cannot seek out the highest quality services at the lowest cost, as they do in any other industries. Today, patients are essentially shut out of the process of defining value, when they should be at the center of it.
Even people covered by Medicare, who have significant protections against practices like balance billing and out-of-network charges, are sometimes surprised by their costs or are in the dark when it comes to opportunities to save money.
One aspect of CMS’ price transparency initiative has received a great deal of attention recently. Our updated guidelines now require hospitals to post a list of their current “standard charges” on the internet in a machine-readable format — meaning the data can not only be read electronically but can also be imported or read into other databases. Previously, CMS required hospitals to make their standard charges available in response to an inquiry, but too often this meant making the information available only in print or a PDF that couldn’t be aggregated with other data and that wasn’t broadly available.
The new requirement sets the stage for third parties to use the charge data to develop tools and resources that are more meaningful and actionable, making it easier for people to access and compare information about costs between different facilities.
The charge lists, coupled with CMS’ already published hospital star ratings on quality, give Americans more information than ever before about the services provided by their local hospitals.
The information hospitals are posting now isn’t necessarily what individuals will pay under their insurance policies, but it is an important first step, and there’s no reason hospitals can’t do more. Hospitals don’t have to wait for CMS or other agencies to go further in helping their patients understand the value of care they deliver. In fact, some hospitals and insurers have gone well beyond the current requirements and provide insurance-specific pricing information or aggregate cost and quality data for consumers.
The University of Utah, for example, has an Estimate Your Out-of-Pocket Costs tool that combines chargemaster prices with individual’s insurance information. UCHealth in Colorado offers individualized estimates through its patient portal or a mobile app, and opened a dedicated call center for price transparency.
I hope that the attention this policy is getting creates an awareness of the new requirements by highlighting both hospitals that are exceeding expectations to empower consumers and those that are not. Patients can be a powerful force to hold the health care system accountable for transparency. CMS encourages people to scan their local hospital’s website for pricing information and share the results on Twitter using the hashtag #WheresThePrice.
The new requirement for hospitals to post their charges is just one of the numerous price transparency steps CMS has taken over the past year. As part of its eMedicare initiative, CMS launched a tool to help beneficiaries evaluate the cost differences between Medicare Advantage and traditional Medicare.
We also launched Procedure Price Lookup, the first Medicare price transparency tool that allows beneficiaries to compare the national average of Medicare payments and copayments for certain procedures that are performed in both hospital outpatient departments and ambulatory surgical centers. There are significant differences in costs between these settings, and the lookup allows beneficiaries to find information that will help them decide where to get care.
To bring more transparency to prescription drug costs, President Trump signed legislation last October to end the practice of pharmacy gag clauses. Those agreements kept pharmacists from telling patients if they could get a prescription drug cheaper by paying cash instead of getting the drug through their health insurance plan. CMS has also proposed requiring pharmaceutical companies to disclose the list price of drugs in TV ads, and also requiring every Medicare Part D plan to adopt a real-time tool to help doctors understand what their patients will pay for the drugs they prescribe.
We are also working toward providing consumers quality and price information side by side as another way to empower them to find high-value care.
As the administrator of CMS, my focus is on putting patients first. They are the most powerful force in our health care system for driving toward higher value care.
While the work we have done to empower patients by increasing transparency is making great strides, we are just getting started as we work to increase price and quality transparency throughout the health care system.
Seema Verma is the administrator of the Centers for Medicare and Medicaid Services.
In the end, there is limited transparency because our excessive reliance on third-party coverage gives consumers little incentive to shop. For most people, the search costs simply aren’t worth the trouble. Although the move toward mandated transparency is a positive step, as Administrator Verma acknowledges, the postings are list prices which bear little resemblance to insurance-negotiated prices. Paradoxically, what are often grossly excessive “chargemaster” prices are only billed to those without insurance, who can least afford to pay them. Insurance-specific out-of-pocket calculators help individual patients but do nothing to reduce health care costs, reflecting and contributing to the problem. However, “We can empower consumers and restore competition in health care” by giving people ownership of their spending decisions. See my December 21 Op-Ed in The Hill to learn more. https://thehill.com/opinion/healthcare/422367-we-can-empower-consumers-and-restore-competition-in-health-care
The “Shopping” false narrative has been promoted by conservative media, in order to mislead Americans about how badly our Market Based healthcare is failing. The insurance companies are using decepetive marketing, they see a jackpot in selling “Trumpcare” and other insurance that is effectively useless. Shopping aound implies there would be clear pricing and fact based information, on outcomes, which there is not. We see the system crumbling and msot Americna knwo that the only solution is Medicare for Alll or Universal Healthcare like other developed nations.
We are being duped, hornswoggled and lied to by clever propagandists, journalsits in the pocket of the industry, and content marketers. Even this feeble attempt at advertising prices was a lie, it is really clear that our regualtory agencies allowed this farce.
It looks like the public is too brainwashed to be aware they were duped. Here we have the head of CMS acting as if this deliberate refusal by the healthcare industry to dulvulge any meaningfull information “step in the right direction.” All we have here is another deliberate bit of misinformation. There is no way to gain any factual information about health prices or quality. In Fact due to loosened reporting requirements and loopholes, none of these providors are under any legal reuirement to post any meaningful relevant facts. The system is much too corrupt to require any facts.
There are several states that have websites listing prices for commonly shopped procedures for instance Maine (https://www.comparemaine.org/) and Washington (www.wahealthcarecompare.com). These websites try to package the data from the individual line items that many hospitals have posted into meaningful procedures.
Anything done to help patients is a step in the right direction but so much more needs done. Someone needs to take a serious look at protecting patients and what can be done to force Providers to protect patients. So much is done protecting the Provider from patients when in fact, patients need protected from the Provider. I could give examples but this is not the place. How does it help patients when a Provider will not take responsibility for what they have done. It’s very simple – do not put any bad stuff in the records and therefore, nothing bad has happened. Case closed.
This won’t amount to a hill of beans because the vast majority of patients can’t “shop” for health care like they shop for cars anyway. Their options are limited by where they live, or by their health insurance, or both. And that’s assuming a relatively healthy patient needing routine care; disabled & chronically ill people, as well as those with a catastrophic diagnosis, are in no condition to delay care to comparison shop for the best price & 5-star ratings.
I agree with you Finn. This is a good step for those with middle-to-high incomes and probably a higher education status. Those living in rural areas of geographically large states will likely still only have the one option, regardless of the knowledge they’ve gained on prices. Families who can’t afford a home computer, internet, and/or a mobile with a data plan (they do still exist) won’t have this information either. Again, good step, but what Americans really need is universal coverage!
Thank you! This is a good start. Please don’t let it peeter out. Especially important to allow certified nurse midwives costs versus OBGyN. See the midwifery data available in Europe vs USA. Are you strong enough for THAT battle?: Tremendous cost savings. Thanks again! Additionally, as a prescriber, I truly appreciate being able to have real time cost comparisons. Bravo !!!
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