Healthcare Price Information Availability Worsening

Diana Swift

May 29, 2018

Despite growing support for greater price transparency, US hospitals were worse at providing price estimates for total hip arthroplasty (THA) in 2016 than they were in 2011-2012, a follow-up survey of 120 facilities reports.

"Our results provide sobering evidence that substantial efforts from government and industry to improve pricing transparency have had little tangible effect on availability of prices," write Safiyyah Mahomed, BSc, a medical student at the University of Toronto, Ontario, Canada, and colleagues in a JAMA Internal Medicine research letter published online May 29.

Posing as the granddaughter of a 62-year-old woman needing a THA, the researchers contacted 120 hospitals in 2016 seeking the lowest cash bundled price, an amount that included all hospital and physician costs. If unable to quote a physician's THA fee, the hospital was asked for the name of an orthopedic surgery practice that could confirm the fee. Contacting each hospital at least five times, the investigators categorized answers as no price information, partial information (hospital or physician price only), complete information (separately obtained hospital plus doctor cost), or bundled hospital-physician price. 

Although clear price information is seen as crucial to patients for informed healthcare decision-making, the 2016 survey showed a decline in transparency across almost all measures since a predecessor survey that was conducted in 2011 and analyzed in 2012. The proportion of hospitals providing a bundled-price estimate dropped from 15.8% (19/120) in 2012 to 6.7% (8/120) in 2016, for an odds ratio (OR) of 0.2 (95% confidence interval [CI], 0.0 - 0.8; P = .001). Those supplying a complete price declined from 47.5% (57/120) to 20.8% (25/120), for an OR of 0.2 (95% CI, 0.1 - 0.5; P < .001). Partial price availability was up slightly to 28.3% (34/120) compared with 22.5% (27/120) in 2012 (OR, 1.4; 95% CI, 0.7 - 2.5; P = .38).

The proportion unable to supply any pricing information rose steeply from 14.2% (17/120) to 44.2% (53/120) for an OR of 4.6 (95% CI, 2.3 - 10.2; P < .001).

"We were quite surprised to see that the availability of price information substantially declined since our last survey," Mahomed told Medscape Medical News. "We're not sure why, but the factors are likely complex, and it seems that hospitals have not taken the necessary steps to make it easy for consumers to get this information."

Because so few hospitals were able to supply details for comparison, the mean bundled or complete price for THA declined slightly from 2012's $44,306.42 to $37,917.50 in 2016 (P = .11). The mean hospital-only cost was $33,276.78 in 2012 and $35,105.30 in 2016 (P = .72). Mean physician price rose slightly from $6583.62 in 2012 to $6988.05 in 2016.

In an invited commentary, Anna D. Sinaiko, MPP, PhD, an assistant professor of health economics and policy at Harvard T.H. Chan School of Public Health, Boston, Massachusetts, calls out the small minority of hospitals that dispensed full information and the resulting adverse implications for healthcare consumers. "The inaccessibility of price information in the US health care system prevents patients from anticipating and incorporating their health care costs into care-seeking decisions and from choosing the best-value clinician (physician or facility)," she writes.

Greater price transparency, she argues, could streamline the healthcare market by incentivizing doctors to lower costs or stress better quality of care, making it harder to charge significantly higher prices without quality improvement — prices Sinaiko says help drive up US healthcare spending relative to that of other countries belonging to the Organisation for Economic Co-operation and Development.

She notes recent efforts to improve price transparency, including web-based price calculators and legislation in Colorado, Massachusetts, and Ohio mandating the provision of hospital/physician price estimates before treatment. So far, such measures appear to be ineffective. In 2016, Medscape Medical News reported that price transparency and electronic healthcare shopping by consumers did not decrease healthcare spending. Last month it also reported that few consumers were shopping electronically for pretreatment pricing information, suggesting the need for new transparency strategies.

One of these is a new model in which clinicians act as fiduciary healthcare purchasers. An important step toward transparency will be to consider physicians as "'buyers' of healthcare services on behalf of their patients when ordering tests and procedures, making referrals, or prescribing drugs," Sinaiko writes. "[E]fforts should be made to increase physician-patient cost conversations and to improve physician-directed price transparency so that physicians and patients understand tradeoffs and make better decisions about care together."

To achieve this outcome, Sinaiko says physicians must be rewarded for lower-priced, higher-value care without limiting access, in a carrot-vs-stick approach.

Currently, doctors are not ideal purveyors of pricing information — for reasons including lack of details on patient deductibles and year-to-date out-of-pocket spending. Recasting clinicians as healthcare buyers will be part of the solution to price transparency, she concludes.

This study received no funding. The authors and editorialist have disclosed no relevant financial relationships.

JAMA Intern Med. Published online May 29, 2018. Abstract, Editorial

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