Despite federal regulations on price transparency, many people still have a hard time comparing costs between hospitals. According to a new analysis from the Kaiser Family Foundation, which uses data assembled by health care software company Turquoise Health, there are limited mandated standards for how hospitals should classify and share prices, and a lack of regulation which has led to vast disparities in pricing, bundling, and charge codes. These issues create significant barriers for the average consumer trying to shop around for the best price, as well as employers looking for the best employee health care plan, per the report.
The analysis looked at a variety of hospital data surrounding two procedures: diagnostic colonoscopies and hip and knee replacements. It found huge variations in reported pay rates for the procedures: Hip and knee replacements were reported as costing between a couple hundred and $1 million dollars.
Errors may be partially responsible for the disparities, the analysis says, but classification issues are also to blame. For example, while some hospitals reported bundled colonoscopy prices, summing up all the care a patient receives during a colonoscopy, others gave colonoscopy prices per quarter hour.
Moreover, the analysis notes that the reported hospital prices often don’t include data on the contracting method and payer class, which hospitals are not mandated to share by the new federal regulations. This can make things difficult for consumers, since it makes it hard for them to be sure who the prices apply to.
Only 24.5% of hospitals are currently complying with all reporting regulations, according to an outside report cited in the KFF analysis.
“To improve usability of the data, additional information about the context and scope of each charge would be important,” the analysis reads. “Some of the challenges in interpreting the price transparency data can be addressed by uniformly requiring additional data elements to accompany each charge.”
Among the data they suggest requiring hospitals to report include:
- Whether a procedure is done in an inpatient or outpatient setting
- What time period the charge covers
- What type of health plan a charge is for
- Whether a charge is for a facility or professional
- Whether a charge is bundled