The New York Times recently published an investigation into prices hospitals are charging. It should come as no surprise that the prices vary wildly, including what a hospital charges different insurers for the same procedure. And, sometimes, the cash price is lower than the insurance-negotiated cost. Additionally, many procedures require multiple billable events that are difficult to piece together. The investigation reveals just how inconsistent these prices are, but also simply that healthcare pricing is really confusing. Often intentionally so.
One argument insurers maintain is that their sheer size and purchasing power allows them to the leverage to negotiate better prices. Better prices should equal lower costs and lower premiums, right? Well, the Times, with the help of researchers, found that often times small insurers are out negotiating these gigantic insurers. Or paying more than the uninsured, cash price, for services. So, are consumers actually getting a benefit? Especially if many times a patient can simply pretend they do not have insurance to secure the best price for the same exact care?
This complexity and opacity filters down and interferes with employers’ ability to find the most affordable and practical plans for their employees. Much of the information related to what insurers pay for care is not readily available, and insurers like to keep that information close, sometimes completely confidential, and shielded behind gag orders. So, in effect, those trying to buy healthcare do not have the ability to see if one policy is better at getting reasonable prices than the next policy.
Another troubling aspect is that some hospitals keep it intentionally confusing: even publicly accessible pricing information will have a prospective patient filtering through hundreds of pages or gigabytes (yes, gig-) of data. In a practical sense, that is often too much information to be useful.
Despite platitudes about commitments to “transparency about potential costs” it is well known that hospitals are more often than not failing in these “commitments” and insurers are contributing to keeping consumers in the dark.
