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Hospital Price Transparency in Delaware: The Ideal and the Reality

By: Dr. Stacie Beck

You usually know what you are going to pay for purchase before you buy. That makes sense. But have you ever tried to determine how much a medical procedure is going to cost before you undergo anesthesia? It can be frustrating.

Well, at last, the federal government has come to the rescue – sort of. The Center for Medicare & Medicaid Services (CMS) now requires hospitals to post all their prices in a machine-readable file (for the highly computer literate) and a selection of “shoppable services” (essentially, non-urgent procedures) in a consumer-friendly format (for the rest of us).

We compared the CMS ideal and the Delaware reality by pricing three procedures that may be familiar to readers: a colonoscopy, vaginal delivery of a baby without complications and a simple cardioversion. The third is an electric shock administered externally to the chest while under anesthesia to restore a regular heartbeat to a patient with a heart flutter.

The Ideal

              The CMS requires that a common price list of 70 shoppable services (or as many as the hospital provides) to be posted. An additional 230 or more, totaling 300 services, chosen by the hospital, must also be posted, reflecting the most common procedures done at the hospital based on local demographics or hospital specialization. Of the three procedures we considered, two (colonoscopy and vaginal delivery) are on the required list and one (cardioversion) is not.

The format can be either a cost estimator tool or a ‘flat file’ with links prominently displayed on the hospital website. The hospital is not allowed to require you to set up an account, use a password or any personal identifying information to access the list.  Four prices should be displayed: the cash price, the payer-specific price, and the minimum and maximum prices negotiated by the hospital with all its payers. ‘Payer’ usually means a health insurance company. Medicare/Medicaid prices are not required to be displayed because they are publicly available elsewhere, although CMS encourages these to be included.

Hospitals must identify and include ancillary services, such as laboratory tests, radiology, drugs, anesthesia services, etc., it provides as part of a shoppable service. Beware: hospitals differ in the ancillary services that are included. Moreover, their negotiated contracts with payers could differ in ancillary services that are included. Though not required, CMS ‘strongly encourage(s) and recommend(s), …(hospitals) indicate any additional ancillary services that are not provided by the hospital but that (hospitals) know the patient is likely to experience as part of the primary shoppable service, and to indicate that such services may be billed separately by other entities involved in the patient’s care’ that are not employed by the hospital.

CMS helpfully suggests a format for each situation, as depicted below.

If all ancillary services are included in the contract negotiated with Health Insurer X:

If ancillary services are included but negotiated separately by the hospital with Health Insurer Y, then:

If only some ancillary services are included by hospital in its contract with Health Insurer X:

While a health insurance plan member may be able to request an estimate of total cost from the insurer, the self-paying patient must be savvy enough to request the cost of all services: those provided by the hospital and those billed separately. The latter requires the patient get the contact information of those the hospital has contracted with (e.g., pathology and/or anesthesia practices, etc.).

The Reality

The hospitals surveyed here are: Christiana Care, Bay Health, Beebe, Chester County-Penn Medicine, and UM Upper Chesapeake Medical Center.

The good news is that all have links to a cost estimator tool on their main websites. However, they are mostly buried under obscure headings, sometimes at the top or bottom of the page in small print, e.g., Billing and Financial Information (Bayhealth) or Resources (Beebe). Christiana Care buries it the deepest, and one has to know whether a colonoscopy or vaginal delivery is an in-patient or out-patient, medical or surgical service. Upper Chesapeake’s link for ‘guests’ is inoperative.

It is important in most cases to have the billing (CPT or DRG) code rather than the procedure name. For example, there are several types of colonoscopies. Most cost estimator tools include statements that certain services may be billed separately, such as physician and anesthesia, but are not specific by procedure. No name or contact information for these outside services is listed, despite being contracted by the hospital, except for Bayhealth in an online brochure.

Few follow CMS’s suggested formats. Below the colonoscopy (CPT 45378) estimate for a self-paying patient is shown for our sample hospitals.

Christiana Care:

It appears that all ancillary services are included in the self-pay price but this is not clear. The cost of vaginal delivery (CPT 59400) without ancillary services is $4,430 and no estimate is provided for a cardioversion (CPT 92960)

Bayhealth

It is not clear what ancillary services are included from this estimator tool. No estimate was available for vaginal delivery and cardioversion costs $1737.

Beebe

No estimate was available for vaginal delivery and cardioversion costs $652. Again, it is not clear what specific ancillary services are included for each procedure from this estimator tool.

Chester County Hospital (Penn Medicine)

Penn Medicine provides estimates specific to each location (here Chester County Hospital) whereas Christiana Care and Bayhealth do not. However, it was easier to find the flat file than the estimator tool. Notice that the prices appear to be far apart for the cash-paying patient from each source. No estimate was available for vaginal delivery and cardioversion costs $688. The latter estimate was available in the ‘flat file’ but not the estimator. There were three entries under cardioversion (CPT 96920) with prices ranging from $1264 to $4477.

UM Upper Chesapeake Medical Center The cost estimator tool is unavailable to non-patients. Only the rather useless chargemaster list is accessible as a machine-readable file.

Conclusions

The CMS has made a valuable advance in health care price transparency. However, our local industry is dragging its feet in obeying the spirit as well as the letter of the law. All the hospitals here list phone numbers for patients to get more precise estimates, however this does not fulfill the intent of the regulation. The ideal is for information to be conveniently available for comparison shopping. Other industries with multiple and complex inputs, e.g., construction, education, etc. have achieved this. The health care industry can too.

Dr. Stacie Beck is an Associate Professor of Economics at the University of Delaware. She has a BS in economics from Boston College and a PhD in economics from the University of Pennsylvania. She has been published in many peer review journals and currently serves as an editorial board member of Eastern Economics Journal.