The Secret Price of Health Care: Transparency
We’ve been hearing a lot about how health care prices are kept secret in this state.
As WLRN and the Miami Herald have been documenting all this week, the tangle of employers, insurance companies and providers makes shopping for health care and health insurance difficult enough — but underneath that web is a layer of secrecy that prevents consumers from seeing what actually gets paid for care.
But not everywhere is so guarded. Reporter Todd Bookman takes us to New Hampshire, which has become a national model for health care price transparency.
We are in Manchester, the biggest city in this small state. It's where Richard Coll lives and makes his living as a property manager. And like so many self-employed, Coll doesn’t have health insurance.
"I haven’t had insurance since 1987 when it skyrocketed to about $3,500 a year from $2,400 a year," he says. "So those are funny numbers today, I suppose, right?"
In these past 25 or so years, he and his wife have paid out-of-pocket when something urgent comes up, while letting other things slide. Including the much over-due colonoscopy he needs, but can’t seem to get a quote for.
"Shopping around, and everyone I asked, whether it was the doctor or an institution like a hospital, they looked at me like I was crazy," he said."
This is a guy who always prices out construction materials before purchasing. Why couldn’t he do the same with his health care? Well, in New Hampshire, unlike, say, Florida, you can. There’s a website called NHHealthCost.org. For the last seven years, it’s listed every hospital’s price for about 30 common procedures. Including the actual prices that insurers pay. The problem is not many people know about it.
"We have not marketed it, we haven’t done any outreach," says Tyler Brannen, health policy analyst with New Hampshire’s Insurance Department. "The world is a bit different now than it was in 2006 or 2007, and these data are a lot more important to a greater number of people."
The technical name for this collection of prices is an "all-payer claims database." More than a dozen states are in various stages of building one.
But New Hampshire was the first with a user-friendly website, which made it something of a laboratory for health policy researchers... like Ha Tu, with the Washington, D.C. group Mathematica Policy Research. She’s studied the New Hampshire experiment.
"The prices from the high price hospitals did shift," says Tu. "Not, perhaps, as a direct result of consumers voting with their feet."
Instead of consumers using the website to shop around, the insurance industry used it to pressure the hospitals that were charging the most.
With the all-payer claims database, it was the insurers who now had more leverage. They could say to hospitals: ‘look, you charge twice what your nearest competitor charges, and we’re not going to pay it anymore.’
And, some of New Hampshire’s large public employers started using the information to negotiate directly with the highest cost hospitals.
So... that’s what happened in New Hampshire. In other states - states with more people and more competition - the results could be different.
But Denise Love with the National Association of Health Data Organizations says not all politicians are willing to find out.
"Money is tight, so funding is probably the greatest obstacle," she says.
Florida’s Agency For Health Care Administration asked for $5 million in the last budget cycle to finance a claims database. The request was denied.
Denise Love says whatever the price tag, it’s a small expense for greater transparency.
"And that is an important thing for state policy makers, but also for the industry," she says, "and hopefully, for the consumers."
Consumers like Richard Coll, who kept putting off that colonoscopy because no one could give him a price. Finally, a local hospital did.
"After 50 you are supposed to get it done, so I been asking about since I was 50, I’m 63 year now," Coll says. "I finally got it done."
Coll got a clean bill of health, and his bill for the procedure was the price they quoted him: $2,000.