Editor’s Note: The Rural Health News Service is funded by a grant from The Commonwealth Fund and distributed through the Nebraska Press Association Foundation, the Colorado Press Association, the South Dakota Newspaper Association and the Hoosier (IN) State Press Association.
By Trudy Lieberman
Imagine a world where you could shop for medical procedures the way you shop for computers. Most likely, price is near the top of your list when you’re looking for a new computer. Not so when the “product” is a hip replacement or an MRI. Generally, what the procedure costs is largely irrelevant. And doctors will make the decision about where the surgery will take place.
For years health policy researchers as well as some employers have tried to build a case for changing the way Americans buy medical services. Their goal is to use competition to force doctors and hospitals to lower their prices. The theory is that if zillions of women avoid mammography centers that charge high prices, those prices will drop. Consumers will vote with their feet.
It’s the kind of medical cost containment that health policy expert Kieke Okma calls “aspirational” cost containment rather than tougher controls that would be obtained through government negotiation with providers.
And while price transparency—the opportunity to easily see what various doctors and hospitals will charge—has become the holy grail of cost containment, we’ve yet to construct a healthcare market that’s as transparent as the market for computers and other consumer goods.
I’ve argued that healthcare is not like buying computers or canned peaches. Are you really going to say, “Hey doc. I can’t afford the hospital you use. I’m taking my surgery somewhere else?” In medicine you need to trust your physician. Relationships and confidence may be as important to effective healing as price.
Then there’s the matter of quality. How do you know the surgeon who performs a cut-rate hip replacement will do a good job? But then, how do you know that a high-priced surgeon will do a good job? That’s the problem. There aren’t reliable quality measures to go along with the prices, and it may be a long time before there are.
This new day of insurance with high deductibles, high copays and coinsurance might be nudging patients to look at price more carefully or at least ask about it. One of those who thinks so is Jeanne Pinder, the president and CEO of http://clearhealthcosts.com/. Clear Health Costs, a start-up that uses New York City journalism students to gather prices for some 30 medical and dental procedures that patients can actually shop for—MRIs, cardio stress tests, teeth cleanings and colonoscopies.
“Healthcare is the last big remaining opaque market place. It’s what real estate, airline tickets and cars used to be before transparency and technology transformed them,” Pinder told me last week. The variation in prices can be “mindboggling.” In California her group found that charges for a colonoscopy ranged from $1,200 to $7,240. Researchers found similar ranges for many other procedures.
I checked out the prices for teeth cleanings from dental offices within a five-mile radius in my zip code and found I could be charged as little as $75 or as much as $299, useful information if I needed a cleaning and was willing to switch from my regular dentist.
In addition, Pinder’s site tells visitors what Medicare pays for a procedure, which is usually much less than commercial insurers pay. The site records prices for only eight metropolitan areas, but she says, “If you’re in Boise, we give you the Medicare rate that will at least give you something to hold onto.”
So if you’re in Boise, Omaha, Denver, Ft. Wayne or any place else, how should you use price information that’s available from Pinder’s site and other similar services?
If patients are on the hook for more than $6,000 before insurance pays—that’s the case with Obamacare policies for individuals—knowing what a procedure costs and that there can be huge variation in out-of-pocket costs may prompt them to check several places before having a colonoscopy or an eye exam.
Knowing what Medicare pays gives a benchmark to use in evaluating the prices you find. If the prices are super high like the $7,000 colonoscopy, the Medicare rate can be a starting point for determining whether a $7,000 or a $2,000 procedure is more reasonable.
Still, it’s hard to evaluate costs for the big-ticket stuff, and it will probably always be impossible to compare prices when you face an emergency.
When you have chest pains and you’re in the back of an ambulance, the last thing you’ll be doing is consulting a website or comparing costs.
We’d like to hear about your experiences in learning about the price of your care. Write to Trudy at
TRUDY LIEBERMAN is a contributing editor to the Columbia Journalism Review where she blogs about health care and retirement. She is also a fellow at the Center for Advancing Health where she blogs about health.