By Lisa L. Gill - Consumer Reports - June 26, 2019
President's Trumps new rule could help consumers learn the cost of an MRI and other treatment before it happens....
Citing instances where patients paid $6,000 for saline solution and $17,000 for stitches, President Donald Trump this week signed an executive order that would require hospitals to make the “cash price” of a medical service or procedure available to a consumer beforehand in an easy-to-read format.
“For too long, it’s been virtually impossible for Americans to know the real price and quality of healthcare services and the services they receive,” Trump said during the signing ceremony. “As a result, patients face significant obstacles shopping for the best care at the best price, driving up healthcare costs for everyone.”
The executive order is short on some key details, such as exactly which medical services the rule would apply to and when it would take effect. Instead, the order directs the Health and Human Services department to draft rules and work through the public-comment process before any action is finalized. On previous similar executive actions, it has taken up to a year before rules were enacted.
This step is the most recent of several measures from the Trump administration meant to increase price transparency in medical care and to lower healthcare prices. Last October, Trump signed bills that ended the “gag clauses” in pharmacy contracts that prohibited pharmacists from volunteering a lower cash price when it was cheaper than a consumer’s insurance. And starting in early July, drug companies will be required to include the price of drugs in their TV advertising.
Some experts believe those measures may not do much, if anything, to lower healthcare costs, and some even say this latest move could cause some costs to rise. “Publicly disclosing competitively negotiated, proprietary rates will reduce competition and push prices higher—not lower—for consumers, patients, and taxpayers,” Matt Eyles, president and CEO of industry group America’s Health Insurance Plans, said in a statement.
Still, making healthcare easier to access and understand for consumers is potentially helpful, Surgeon General Jerome Adams, M.D., told CR at the Aspen Ideas Festival this week. And, he notes, many Americans need help managing medical costs, which, he says, “can bankrupt almost anyone.”
Even as experts debate whether knowing the price of a procedure or cost of an MRI ahead of time will ultimately lower the cost of healthcare in this country, there may be some instances when knowing that information can help you. Here are four of them:
Just over 40 percent of Americans have a health insurance plan that requires them to pay a minimum of $1,300 out of pocket for an individual and $2,600 for a family before their benefits kick in, according to the Centers for Disease Control and Prevention. If this describes your situation and you need to pay for a medical service but have not yet reached your deductible, shopping around for your healthcare, when possible, could reduce your costs. That’s because you could find that healthcare providers in the same area charge different amounts for the same procedure or test.
For example, a 2019 RAND Corporation study found, among other things, that costs could vary for the same procedure among several hospitals. In the Indianapolis area, an endoscopy could cost $169 at Eskenazi Health or $233 at nearby Franciscan Health. Another example: The standard cost for an inpatient childbirth at Medical Center of the Rockies in Loveland, Colo., is $17,505. But just a few miles away at Banner Fort Collins Medical Center, inpatient childbirth would cost $10,415, according to RAND’s report.
To be sure, this sort of comparison shopping in healthcare applies only to “about 7 percent of the nation’s healthcare spending, which is nonurgent, out-of-pocket, and shoppable by consumers,” says Chuck Bell, program director at Consumer Reports, who has studied this topic.
“Consumers who use out-of-network services could be billed at rates three to five times higher than negotiated rates that insurers pay for in-network care,” says CR’s Bell. Uninsured patients could be charged even higher rates, and have to cover the entire cost out of pocket, he notes.
You could have an easier time with determining prices on services that are clear-cut, says Stephen Buck, a healthcare and drug industry consultant with expertise in price transparency. He cites that finding out the cost of an MRI, lab tests, or standard office visits as examples.
But for more complicated treatments for conditions such as a stroke or heart attack, or any unplanned hospitalization, Buck says, it could be much more difficult to obtain prices in advance or compare prices among service providers.
When Anne Maxfield, who runs the website Accidental Locavore in Poughkeepsie, N.Y., developed a cyst on her finger, her physician wanted her to get an MRI. But because Maxfield had not yet reached her plan’s annual $4,000 deductible and she would have to pay the cost of the MRI herself, she investigated how much it would run.
“I wanted to know what I might be looking at in terms of a copay for the procedure,” she says. But it wasn’t easy to get a clear answer. “I called the doctor’s office and then the radiologist, and no one had a clue. They sent me to billing.”
So when she learned the cost of the MRI would be more than $4,000, Maxfield went back to her doctor and questioned the need for it. In the end, they decided she’d wait to see if the lump changed or if it really began to bother her. “What stopped me was getting sucked into big copay bills for a minor injury.”
While this worked for Maxfield, some experts believe in certain cases, knowing the cost of treatment could delay a person from getting needed care. “Healthcare is already a very complex topic,” says Julie O’Brien, a principle at the Center for Advanced Hindsight at Duke University, who studies behavioral economics in healthcare. Introducing additional facts about a decision “may lead to decision paralysis, causing people to disengage or possibly delay decisions,” she says.
What’s more, whether a consumer gets a treatment could be affected if people focus only on the short-term cost without considering the long-term benefit, O’Brien says.
Takings steps like Maxfield did with her doctor, where the two of them discussed the cost and the benefit of having the MRI scan, and decided together to hold off for now, may help prevent that problem.
A 2018 nationally representative survey of more than 2,000 adult Americans who have health insurance by Consumer Reports found that 27 percent had received at least one surprise medical bill or a higher-than-expected medical charge in the last 24 months. Of those, 29 percent said they were charged more than they expected for a procedure that was preauthorized by their insurance; 12 percent said they were charged an out-of-network rate when they expected the charge to be in-network.
In these instances, Bell at CR says if Trump's executive order was fully implemented, consumers could negotiate for lower prices for surprise bills if they had better access to the actual prices insurers pay.
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