health care
4:45 pm
Mon March 18, 2013

Group gives Wash. state F in disclosure of health care costs

Can’t get a straight answer on how much your medical treatment will cost? State laws may be partly to blame.

Washington state has earned an F in disclosure of health care costs, according to a new report card on price transparency. But one economist says what we don't know hasn't  — and won't — hurt us. 

The report was published Monday by the Health Care Incentives Improvement Institute, a consortium of big health care purchasers, including General Electric, Wal-Mart and The Boeing Company.

Washington and 28 other states earned an F and seven others earned a D for policies that keep patients and their families in the dark on prices. The failing grade went to those with practically no transparency requirements.

Only two states — Massachusetts and New Hampshire ­— earned an A, which reflects 60 percent and above.

The high prices that American health care providers charge, often with little connection to actual costs, have been in the national spotlight lately. Time devoted its entire March 4 issue to an investigation by Steven Brill.

Weighing the cost of not knowing

Most consumers are unaware of the tremendous variation in price. For instance, prices for knee replacement surgery in the same California market can range from $15,000 to more than $100,000, depending on the hospital, with no discernible difference in quality.

High-deductible insurance plans are becoming more common, with employers hoping consumers with skin in the game will shop around to help keep prices down. But, the authors note, consumers cannot make informed decisions without being able to comparison shop on the basis of either price or quality.

"Consumers deserve to have as much information about the price of their health care as they do about restaurants, cars, and household appliances," the report says.

The grades reflect the quality and scope of the pricing data that states require and how well they disseminate it — public websites gain high points, for example. The grades also discriminate between charges, the prices that hospitals say they bill for services, and what a consumer and her insurance company actually pay for them. There is often little connection between the two. States that require disclosure of actual prices earned higher grades.

But one researcher argues it is precisely because of this discrepancy in fees that more transparency would not benefit the patient.

Modest deductibles and co-payments of any size mean that what the consumer pays does not vary by the provider used,” wrote Paul Ginsburg, economist and president of Center for Studying Health System Change, in USA Today.

Ginsburg added more transparency could lead to higher prices as consumers, equating price with quality, shift toward the pricier providers.

The Health Care Incentives Improvement Institute plans to update the state report cards annually.