I was intrigued when I saw an interview of Dr. Marty Makary talking about his book – The Price We Pay, What Broke American Health Care – And How to Fix It. How to fix America’s broken health care was what I wanted to learn more about. I bought the book.

This book was the product of Makary’s long listening tour across the country. He shares many stories about patients being unfairly overpriced for medical procedures. Makary also points the reader towards helpful resources to use for comparison – shopping for medical services and hospitals that are already sharing user-friendly medical prices on their website.

Dr. Makary spotlights Dr. Jeff Rice’s story to emphasize the lack of transparency in medical prices and how Dr. Rice created a helpful service for patients after the experience.  Dr. Rice’s 12-year-old son hurt his ankle and needed elective surgery. Rice looked up the billing code and called the hospital to find out how much it cost. The hospital told him the cost would be $37K.

He knew there were more invasive procedures that didn’t cost as much. How did the hospital come to this price? Rice also had to pay a $5K deductible first. The hospital ended up reducing the amount for the procedure to $15K with a network discount.

Rice pursued the matter further. He called the surgeon who was doing his sons operation. Rice asked him “Do you do the same operation at any other facility?” He said, “yes.” The surgeon directed him to a different facility. Rice called the new facility for a quote and found it would cost $1,500. for the procedure. This was an easy decision! Rice’s son had the surgery at the new facility and everyone was much happier.

This experience led Rice to start his own company called – Healthcare Bluebook. The goal is to show the “fair price” for common medical procedures and tests.  Healthcare Bluebook gathers price information from employers who self – fund their health care. Prices are reviewed and this is how fair prices are determined. This program makes it easy for both employers and employees to know the fair price for medical procedures and the nearest health care provider that offers fair prices.

Healthcare Bluebook is a helpful tool if your signed on to the service. Starting January 1, 2021 CMS has rolled out a new transparent pricing requirement for hospitals that’s mandatory at the national level. Hospitals are required to post a total of 300 services ranging from hardware used in the operating room to drugs given and fees of hospital employed physicians. Seventy of the required services were selected by the government. The remaining services are up to each hospital to determine which services will be shared publicly.

Some of the requirements under this new rule are:

The publicly posted prices online must be in a consumer-friendly format per CMS.
For each service or product posted online will include: the gross charges, the actual charges, lower prices that were negotiated with the health insurance companies. In addition to this, the prices negotiated with insurance companies will be de-identified. Cash prices offered to patients who are uninsured or not using insurance will be included as well.

This new Hospital price transparency rule will be helpful to consumers who are uninsured and enrollees with high deductible plans. It doesn’t allow consumers to comparison shop health plans between health insurance companies. Look for this option down the road in 2022.

Employers

The new rule will inform employers how much they’re paying hospitals and compare with others in the area. The hospital transparent price information will reveal what items or services are being extremely overpriced compared to other items or services that cost less.

The benefit of employers being informed of high prices for some of these services opens the door to employers to reject specific prices or the hospital all together. Another more realistic option is to create incentives to use lower-cost facilities.

For instance, there are 3 hospitals in my location. The employer can opt to pay the cost of the least expensive hospital. When an employee wants to go to one of the other two hospitals then the employee would be responsible to pay the difference.

The billion-dollar question is “Will price transparency reduce health spending?” The new hospital rule will force  expensive hospitals to reduce their prices to be more competitive with other hospitals in the area.

What Consumers Need to Know

Keep in mind that these prices won’t be exact. It’s a guide to the prices to expect prior to services rendered. Unexpected complications can happen during a surgery and prices will increase. The other conditions that will affect consumer cost are type of insurance plan, the remaining amount of yearly deductible and the degree of severity of the illness.

Tools are available to aid consumers in reviewing the deductible amount due to insurance companies. Some Health Insurance companies provide these tools in the member portal of the website. Members will need to log-in to their account to view these tools.

There are also apps separate from Health Insurance websites that are also helpful. The top three are Consumer’s CHECKBOOK, Stride Health and Clear Health Analytics.

Here are some features of each app. –

CHECKBOOK app

This app can be found at: checkbook.org

A benefit of this app is that consumers can see all the plans on one page.  This app received 4.6 out of 5 stars in the reviews on Facebook. Each plan factors in the estimate average yearly cost, risk, quality rating and which plans preferred doctors are associated.

Stride Health App

This app can be found at stridebenefits.com

Their mobile app is known as the “world’s first health insurance recommendation engine.” It’s well suited for contract laborers and self-employed workers. It recommends a health plan by predicting the total annual costs that are based on demographics, medical conditions, prescription drugs, etc.  This app customizes a health plan that’s a good fit for the consumers investment. Side-by-side comparisons is a valuable tool by prioritizing the most important features of plans.

Clear Health Analytics App

This app can be found at clearhealthanalytics.com

The Clear Health Plan Selector has a cost estimator. It shows an estimate of premiums and out of pocket expenses. The user-friendly approach shares the type and quantity of services available to use during the year.  The app analyzes the detail of each plan and then customizes a plan for the consumer. The benefits are the plans are displayed in a side-by-side comparison, consumers discover if your preferred doctor is in-network, which drugs are covered and how much it costs.

Status of the New Rule

The hospital industry has concerns with the new rule. One concern is that it violates the 1st amendment to the Constitution and the other concern is it pushes hospitals to share industry secrets or their hidden secret prices. The American Hospital Association is waiting to discuss this issue with the Biden administration. While the AHA (American Hospital Association) and Americans wait to get incoming President Biden’s assessment of CMS’s new rule consumers can take advantage of the resources listed below.

Some hospitals or medical centers in the U.S. are already practicing fair pricing for services and displaying these prices on their website. Dr. Makary points out these facilities in his book – The Price We Pay One of the facilities is the Surgery Center of Oklahoma. Everyone gets one fair price here. As a result, Dr. Keith Smith has increased business with this business model. He’s saved millions in overhead costs and this surgery center has resources for free care.

Another hospital that has fair pricing is Columbus Community hospital in Nebraska. It charges one fair price per procedure. Every insurance company receives a 4% discount. Mike Hansen is the CEO. Hansen has reduced costs by keeping middle management to a minimum and treating his employees with good pay and benefits. The hospital pays 5% or more on taking care of people who can’t pay for hospital services.