A Student's Summer Reflections on Price Transparency

Jeffrey Herman is a sophomore at Brandeis University and just completed a summer internship with Costs of Care.

I can’t think of a single industry that is more inherently personal—more emotional than health care.

Everyone has a story of how the health care system has impacted their lives. My family’s experience with the healthcare system had both positive and negative results. Thankfully, my brother survived a brain tumor as a young child and my father’s heart disease was treated early enough to prevent a heart attack. However, the bills for these procedures were astonishing. Perhaps even more shocking was the complete inability of doctors and insurance companies to give an accurate estimate of what the procedures would cost. There was no more clarity with routine follow-up procedures like MRIs and stress tests. On any given day, a doctor may order the same test several times, so how does uncertainty exist about how much it costs? And if doctors don’t know the cost, how are patients supposed to be informed consumers of health care?

Many insured patients don’t worry about how much a procedure costs—frankly, with third-party payers, they often don’t have to. In fact, if you are sick and diagnostic tests are covered, you might push for your doctor to administer all potentially beneficial services. However, at some point the over-utilization of services at unclear prices results in detrimental care that is ultimately more costly than helpful. In some cases, particularly for patients with high deductibles or loop holes in their insurance plans, these costs may even cause significant financial harm.

When policymakers and doctors try to arbitrate solutions to the problem of price transparency, progress often can seem out of reach. Most avenues to change are either politically unpalatable or financially impractical. So instead, I propose addressing the problem from a grassroots level. To fix the American health care system as a whole we must engage consumers and doctors to care about it on a personal level. Informed consumers will push for efficient stewardship of resources and doctors will oblige if there are the right incentives to do so.

Several websites, such as Clear Health Costs and HealthCare Bluebook, provide easily accessible information about the price of various procedures. Clear Health Costs even breaks down prices by specific physicians/hospitals. If it is so easy to find reasonably priced care, patients will be more inclined to be cost-effective consumers. Additionally, such websites could exert competitive pressure on caregivers to both have reasonable prices and to be knowledgeable of what their services cost. Assuming that these websites will expand and spark similar sites, they will become an invaluable resource for health care consumers and caregivers.

The widespread use of social media also has significant potential to provide cost information to consumers. Eventually, Twitter and Facebook users may be able to access price information while connecting with friends, family, and other aquaintances. This convergence of health care information with personal networks promotes knowledgeable consumers. Perhaps more importantly, if these health care cost-consciousness permeates social media, users will feel social pressure to spend resources wisely. Imagine 750 million Facebook users with a price transparency application that appears in a newsfeed right along with friends’ status updates and wall posts.

After reflecting upon the state of the American health care system, it can be difficult not to feel optimistic. Party politics seem to overshadow progressive policies. Any potentially beneficial policy or idea is immediately rejected because it will be politically inflammatory or financially taxing. However everyone—on all ends of the political spectrum—can agree that change is necessary. Perhaps a grassroots approach that engages the public in cost-effective care with greater price transparency will bring about much needed reform. Providers and lawmakers will take notice if the public pressure is great enough. Ultimately, it is up to us.

Cost Awareness Anecdote: Fraction of the Pie

The following anecdote is from Eric Lespin, a patient from Alaska.

A torn meniscus. It did not disable but it impaired, and unpredictably. My stomach learned quickly to tighten at the sound of A.’s peculiar whimper in response to a crippling pain that would shoot through her at seemingly innocuous movements of the afflicted leg. We have health insurance of sorts, the type that will help you keep your home if tragedy strikes, but that does not shield you from the brunt of what most of day-to-day health care cost is about. We’re well practiced in deferring and foregoing care. Here however, we reluctantly acknowledged that a hospital would need to be visited and a doctor consulted.

Tests and a physical examination made clear that an operation was unavoidable. The doctor was a thoughtful man who conscientiously went through what the operation would entail. Surgery would take half a day, then back home by afternoon, convalescence over the following few weeks, with complete recovery the usual outcome. While not painless, the procedure seemed reassuringly routine. His tone was caring and his outlook about our case optimistic.

The admirable candor with which medical personnel have learned to speak about difficult topics concerning our bodies and our care did not extend to the costs involved. The question of what the procedure would cost, gently broached, initially baffled the staff, eliciting answer-deflecting counter-questions about the adequacy of our insurance coverage, but resulted in no quotes or estimates. With my insistence on the point, an assistant promised that a figure could be determined, if we needed it, once the surgery was scheduled. “But not before?” I was now the baffled one.

A person who linked dollar amounts to medical procedures was eventually found and I was seated at her desk. She required a billing code however, and without a scheduled surgery there was none to offer. As we danced around that issue, my concern over the cost of repairing A.’s knee was replaced by another curiosity: “Is what I’m asking not routine?” It was not. A billing code was finally lifted from the paperwork of a previous operation, and after some minutes a dollar number was produced. It was a sizeable figure, but less than what I’d been led to believe such things cost, at least in the United States. I suspected something still was not clear. “This is then what I’ll pay, roughly, to have the procedure done?” I asked in a half questioning, half confirming tone. “No, that’s just our part of it, the hospital has their charges, of course.” “But we’re in the hospital and I’m asking you for an estimate of what this operation will cost.” She explained, with some frustration, that the operation itself was only a fraction of the pie; she had no way of knowing what the hospital might charge.

This was not actually true – she was far better situated than I to know what the hospital charges would be. It was if I had asked for the price of a new car on a showroom floor and had been told by the car salesman that only the engine could be quoted – other components’ prices would need to be discovered separately, by me. In the real world, the total price for most services and products are conveyed to the consumer by the seller or provider at the end of a long chain of added values. In this case, the multiple components of the medical care provided a shield to simultaneously obscure the cost and justify its lack of availability. The billing person scribbled down a number for me to call, then asked if there was any other matter where she could be of assistance.

Hoping for a face-to-face conversation, I asked at the hospital information desk for directions to the office matching the telephone number scribbled on the scrap of paper. “That’s not in the hospital”, the information desk attendant declared, “but the call is toll-free”. We went home. For some reason, the inability to locate a price anywhere on the hospital premises for an operation that would take place there shook us as much as would have an encounter with a manifestly incompetent doctor. Though A. and I talked only briefly of the cost, or rather the opaqueness of it, we were both invaded with a foreboding that a thing so untethered to its own cost would be in some unspoken way unreliable, dangerous. That night, A. announced that she wanted to do the procedure overseas . . . anywhere but here.

Costs of Care in the National Press

As the director of Costs of Care and a practicing doctor, I occasionally have the opportunity to offer public commentary on healthcare costs from the doctor's perspective.

I recently spoke with national media about the role (or lack there of) of costs in medical decision making. I'm quoted in last week's New York Times, for a great article entitled "Teaching Physicians the Price of Care".

The same article was syndicated here on National Public Radio, here on Kaiser Health News, as well as several regional newpapers and radio stations around the country. The quote that was used was also picked up for paraphrased versions of the story throughout the blogosphere.

Lastly, an op-ed I wrote aimed at doctors, called "Paying Attention to Patient's Pockets" went online yesterday.

Looking forward to your feedback/comments!

Neel

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