Price transparency rule seen as “first step” forward

A new federal rule requiring hospitals to display complex pricing information online is seen as a “first step” toward greater transparency in health care.

Katherine Bisek, vice president of strategic initiatives for UnitedHealthcare, says the change could shed some light on how prices can vary for the same medical procedure.

But she says the rules could go further by including information from health insurance companies as well.

The recent rule change from the Centers for Medicare and Medicaid Services requires hospitals to publicly post their charges in a machine-readable format at least annually, according to the Kaiser Family Foundation. That has led some to conclude that most consumers will learn little from the new information.

Still, Bisek told that “we believe this helps… any level of transparency helps.”

She points out that in Green Bay, the cost of a knee MRI can range from $734 to $2,957. But in Milwaukee, that can vary more widely, from $280 to $4,140.

The difference is even more dramatic for more significant procedures, such as back surgery. For a spinal fusion procedure, the cost in Green Bay is between $52,693 and $60,385. In Milwaukee, that ranges from $39,120 to $103,630.

Bisek says some consumers are saving money by comparing prices on a comparison platform UHC makes available to members. She says the trend toward tools like these is “a great step in the evolution of transparency.”

However, comparing prices from the newly available hospital data can be a difficult process without the help of consumer-friendly resources such as UHC’s cost estimator site, or the Wisconsin Hospital Association’s PricePoint platform.

That’s because consumers would have to piece together prices for each part of their stay, as they’re displayed separately online.

For example, to figure out the cost of a trip to the emergency room, patients would have to determine the cost of any tests given, any medications dispensed, the physician charge, facility fees and more. That’s from an analysis by the Kaiser Family Foundation.

The picture is complicated further by the fact that few people actually pay the full charges for medical care. And some procedures have very complicated designations that are unlikely to mean much to the average patient.

Brian Potter, chief operating officer for the Wisconsin Hospital Association, says the newly public information won’t be very helpful to consumers. But he also called the rule change a “first step” toward greater transparency.

A survey from UHC found more than one-third of U.S. respondents say they’ve used the internet or other mobile apps in the past year to comparison shop for health care. That’s up from 14 percent in 2012.

According to UHC Communications Director Anthony Marusic, members who use UHC’s online and mobile resources before receiving care pay 36 percent less than non-users. Those numbers come from an internal UHC claims analysis.

Bisek notes there’s more emphasis on transparency in the industry as the cost of care continues to grow. She adds: “Transparency is a mechanism to control that cost.”

Bisek says the national discussion on transparency is an evolving one. She says the next step in that evolution is ramping up engagement with consumers, to get them more actively involved in the process of managing their own health.

“As we think about next steps, it’s continuing engagement,” she said. “We’re seeing employers offering incentives like gift cards or discounts for using price transparency tools.”


–By Alex Moe