Just over a year ago, if a person went to the hospital for an MRI, they would have no clear way of knowing how much the hospital would charge for that service. As of Jan. 2021, the Hospital Price Transparency Rule rewrote that expectation — but are hospitals actually complying?
Hospital price transparency requires every hospital in the U.S. to provide a machine-readable file that includes the costs of all services and items and a consumer-friendly display of shoppable services online. After a year of collecting data, healthcare navigation platform Turquoise Health has launched a price transparency scorecard, assessing compliance by scoring hospitals on a scale of one to five, based on how complete its machine-readable file is.
“At this point, we have looked at over 4,000 files, and there’s a lot of variation in not only the file format and structure but its contents,” says Marcus Dorstel, head of operations at Turquoise Health. “We want to represent the completeness of these files so people can gain insight into their local hospital.”
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While the scorecard’s official launch is expected in the spring, anyone can currently access it. The scorecard acts as
“A score of four or five tells us that the hospital is providing information we would expect given its size and type — they included a good number of services, insurers and health plan distinctions, too,” says Dorstel. “The same service, even with the same plan at different hospitals, can cost a different amount.”
This information could save consumers thousands of dollars. For example, the cost of vaginal child delivery varies by $11,000 in the Boston Metropolitan area, according to the Health Care Cost Institute. Even within the same hospital, prices can vary depending on the insurer. A New York Times investigation found that an emergency rabies vaccine at Intermountain Medical Center in Utah costs approximately $6,000 with Humana ChoiceCare and $4,200 with Cigna; if that patient is uninsured, it could actually cost as much as $2,000 less.
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“The rates all come down to who has leverage,” says Dorstel. “If you’re a big health system negotiating with a smaller insurer, you will get more beneficial rates. But big plan providers like Aetna or Cigna can demand the prices they want.”
As valuable as this information is, when it comes to total compliance, hospitals are falling short. According to PatientsRightsAdvocate.org, only 143 out of 1,000 hospitals surveyed met all requirements set by the transparency rule, with the biggest non-compliance area being complete machine-readable files. And while this survey found that 84% of hospitals published a price estimator tool, only 28% presented 300 of its most common services in a consumer-friendly format. Additionally, 20% of hospitals did not allow uninsured or self-paying consumers to view discounted cash prices, despite the price transparency rule requiring it.
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Dorstel hopes tools like Turquoise’s scorecard not only gives consumers the power to choose hospitals that offer in-depth price transparency, but will motivate hospitals to put more effort into compliance. Although complaints and audits can lead to a hospital paying more than $2 million per year for violating the price transparency rule, pressure may need to come from consumers as they gain the power to choose where they receive their care.
“I should know if I could drive five miles down the street to a different hospital and pay less,” says Dorstel. “We didn’t have transparency before 2021, but this is the start to consumers having the ability to be savvy shoppers of healthcare.”
