New Data Exposes Scammy Hospital Pricing; Now Let's Crowdsource Some More
from the it's-a-step dept
A few months ago, we wrote about Steven Brill’s amazing article in Time Magazine about hospital billing. As we noted at the time, the story confirmed what many people believed: that healthcare is a giant economic scam, and it’s often the hospitals (not necessarily the insurance companies) who are driving the massive increases in costs. A big part of the scam is the fact that hospitals don’t reveal their price list — known as the “chargemaster.” It’s all a giant secret. There’s no such thing as comparison shopping. There’s simply no data anywhere.
Well, that may be changing. The US government just released data on what various hospitals charge for various things, along with how much Medicare actually pays in return. This has quickly resulted in people noticing massive differences in pricing for the same treatment in different hospitals (including, at times, hospitals very close to one another). This release definitely provides some significant data about just how massively hospitals are overcharging for things, even if most patients never pay the listed fees.
Still, it’s not quite enough. Brill has responded to the release by noting that while this is a big deal and can be quite helpful in highlighting how broken the system really is (and hopefully will lead to a lot more reporting on the subject), it could go much further:
The feds need to publish chargemaster and Medicare pricing for the most frequent outpatient procedures and diagnostic tests at clinics—two huge profit venues in the medical world. But an even bigger step toward transparency would be collecting data that Medicare doesn’t have: exactly what insurance companies pay to the various hospitals, testing clinics and other providers for various treatments and services.
After all, as the hospitals themselves concede in downplaying their chargemasters, these insurance prices are the ones that affect most patients.
And that is one price list where there is close to zero transparency.
While hospitals and insurance providers clearly will not want to give up that information, Bill points out that patients do find out this information, so perhaps we should crowdsource the data:
So even if insurance companies don’t want to participate, Brill writes, states could crowdsource price information from patients:
…state pricing centers could gather the information from patients who volunteer, in exchange for a promise that their names won’t be used, to submit their Explanations of Benefits. After all, a hospital or insurance company can’t claim a patient can be prohibited from talking about or making public his or her own bill.
For a market to work in any effective manner, pricing information must be clear. It’s not that way at all in healthcare, and it needs to get that way fast if we’re ever to get healthcare pricing under control.