Imagine going into a restaurant and seeing every item on the menu listed as “Market Price.” You ask what that price is, but the server can’t tell you. Now imagine every restaurant in town has all their items listed as “Market Price.” How could you possibly decide what to order and where?
That is the exactly the situation Americans find themselves in when they need hospital care.
The same test or procedure at two different facilities can have radically different negotiated prices, often thousands of dollars apart, and the patient has no way of knowing. This difference matters to the large number of patients who have high deductible plans who end up bearing most of the costs. What we need in health care is the equivalent of a Kelley Blue Book for cars, a resource so average patients can find out what care should cost. This lack of price transparency doesn’t happen in any other industry, and it needs to stop in health care.
Americans should know the price of their health care before they get it.
The federal government has addressed this problem by issuing the hospital price transparency rule, which went into effect Jan. 1. The problem is many hospitals are not complying. A report released last month by a national nonprofit organization showed that the vast majority (94.4%) of hospitals, including most of those in Pennsylvania, were not following the rule. The refreshing exception was Temple University Hospital, which the report found was among the fewer than 6% of U.S. hospitals showing all their prices. This hospital should be commended.
The hospital industry went even further to avoid transparency by filing a lawsuit but the courts rejected the legal challenges in favor of consumers.
Although doctors are often blamed for rising health-care costs, we can assure you that physicians want what patients want. We want to know prices, too, but hospitals and insurers also keep us in the dark.
We have written to Pennsylvania Attorney General Josh Shapiro asking him to help enforce the law and hold hospitals accountable. To do that, our government needs to dramatically increase the financial penalties imposed on hospitals that don’t follow the rule. Currently, the penalty is only $300 a day. That is woefully inadequate. Worse, the government has yet to fine a single hospital for not complying with the government’s own rule. What good is a law with no teeth? The fine needs to be increased significantly and robustly enforced. We should also eliminate the loophole in the rule that allows hospitals to simply provide estimates, not guaranteed prices.
As physicians, we care about our patients’ physical and financial health. We do not want to see them neglect their care because they can’t know the cost. The best way to protect their finances is through complete price transparency. The ability to see and compare prices online would usher in price competition, which would drive prices down, allow patients to shop for the best value for their health-care dollar, and slow the unhealthy trend of consolidation in the health-care industry. Our hope is that our attorney general will agree.
We have a long way to go to fix the dysfunctional financing of our broken health-care system. Transparency is an essential part of the solution. The right to know the cost of care before getting a surprise bill is critical. Consumers should demand nothing less.
(Dr. Mark Lopatin Is a rheumatologist in Montgomery County; Dr. Arvind Cavale is an endocrinologist in Bucks County. Both are members of the Association of Independent Doctors.)