At least seven states have laws mandating an on-line database showing the cost of medical treatments by different providers
At both the federal and state level, the trend toward greater transparency in health-care pricing continues to spread. This is a trend which is designed to require providers—including clinical laboratories and pathology groups—to make their prices for laboratory testing easily accessible to patients and consumers.
Across the nation, federal and state governments are implementing policies aimed at helping consumers make informed health-care decisions. Ultimately, pricing transparency is expected to contain rising health-care costs by creating consumer-driven competition between providers. This is intended to increase price competition among hospitals and physicians’ offices initially. Medical laboratories will eventually be included.
Oregon recently joined seven other states [Utah, Minnesota, Tennessee, New Hampshire, Vermont, Massachusetts and Maine] in passing legislation to establish a statewide, online database of costs for medical treatments. The Oregon database, which should be operational by fall 2010, will list all medical claims and costs paid by insurance companies, including Medicare and Medicaid.
It is still unknown if Oregon’s database will allow the public to compare costs by provider. This decision has yet to be made by an advisory group composed of payers, providers, consumer advocates, researchers, public health officials, and others concerned with how this data should be released.
Nearly two years ago, Massachusetts launched MyHealthCareOptions, an interactive, consumer-friendly web site. This web site allows consumers and other stakeholders to compare common healthcare procedures at hospitals in the state. A patient can now compare both cost and quality measures for a range of procedures at different hospitals and outpatient facilities. These range from hip replacement and angioplasty to a mammogram.
In an article posted on WBUR.org, JudyAnn Bigby, M.D., Massachusetts Secretary for Health and Human Services, noted that her state’s web site is designed to increase public awareness of the true cost of healthcare, to provide consumers information they need to make healthcare decisions, and to encourage quality and cost efficiencies among providers.
“The vast majority of individuals do not know the true cost of medical services,” she said, noting that the actual cost is tightly guarded by insurers and hospitals. “Although there are many reasons why this information is not generally made public, most can be boiled down to the common concern that the loss of confidential pricing information will disrupt one of the most competitive healthcare markets in the world,” Bigby charged.
“They [consumers] have even less access to information about the comparative value of that care; for example, whether a single procedure is provided at the same quality and cost at various hospitals,” explained Bigby. “Without access to comparative information, individuals cannot possibly make informed decisions about the kind of care they receive where to get it, and how much it costs.”
Bigby did acknowledge that more research is needed to determine how providing consumers with access to price and quality information impacts how they make decisions. It is hoped that informed consumers will enjoy higher health outcomes, along with improved access and lower costs.
Pricing transparency has major implications for hospital and independent clinical laboratories. This trend, as it becomes more established, is likely to force all classes of providers to respond with more competitive prices. The slow market response to recent efforts by such states as Oregon and Massachusetts demonstrate that it may require several more years before increased transparency in provider pricing is commonplace.