Healthcare prices remain a big secret, hidden from consumers in all but a handful of states, according to a report released Tuesday by a California-based nonprofit that gave Florida and 44 other states failing grades for neglecting to enact legislation and to create a public-access website that gives patients the data they need to budget personal medical expenses.
The report was produced in partnership by Catalyst for Payment Reform, a nonprofit that partners with large employers such as Walmart and AT&T to advocate for healthcare price transparency, and Health Care Incentives Improvement Institute, a Connecticut-based nonprofit that offers healthcare cost consulting.
The groups aimed to make a simple determination: How readily can consumers find healthcare prices in each state.
Suzanne Delbanco, executive director of Catalyst for Payment Reform or CPR, said the need for meaningful price information is “more important than ever” as consumers are asked to shoulder a rising share of their healthcare costs through higher premiums, deductibles and co-insurance rates.
“Consumers really do need to be more careful shoppers to protect their healthcare resources,” Delbanco said. “That’s what’s really driving this.’’
But healthcare price information is not only hard to find, it’s kept secret by hospitals, doctors and insurers, who often hide their negotiated rates behind confidentiality agreements.
For consumers, that information can be valuable because prices for the same procedure can vary significantly from one hospital or doctor to the next — usually with little difference in quality.
Even the prices paid by insurers for the same procedure in the same hospital can vary greatly, depending on factors such as each insurer’s market share in a doctor’s or hospital’s geographic region, and the insurer’s willingness to provide incentives for its members to use a particular hospital or doctor.
But hospitals and doctors also influence consumer healthcare costs by the reimbursement prices they negotiate with insurers for medical services.
The larger the hospital system, and the greater its dominance of a geographic area, the more leverage that hospital system can exert to extract higher reimbursement prices from insurers, who then pass those increases on to employers and consumers with higher premiums, higher deductibles and higher co-insurance rates.
Increasingly, though, states legislators are prying open those secret prices through laws requiring greater transparency, and the creation of what CPR considers to be the gold standard of consumer tools: Information repositories, or so-called “all payer claims databases” that provide accurate and complete price information for hospitals, physicians and other providers.
The report awarded passing grades to only five states: Colorado, Maine, Massachusetts, Vermont and Virginia — all of which have publicly accessible databases.
Researchers looked at Florida, which has a state-mandated website managed by the Agency for Health Care Administration at floridahealthfinder.gov, and gave it a failing grade for a narrow scope of information and poor utility.
The report noted that Florida legislators have adopted several statutes requiring some level of price transparency and disclosure from hospitals and doctors, but not from insurers.
The type of data required under Florida statutes, however, is not the price actually paid for care. It’s the amount charged by the healthcare provider — a far less reliable indicator of what consumers will actually pay, Delbanco said.
While Florida received a failing grade in the report, AHCA officials have been trying to improve price transparency.
This year, the agency requested about $5 million a year to build and maintain an all payer claims database, dubbed the Health Care Cost Analytic Tool or HCCAT.
In the funding request, AHCA officials asserted statutory authority to compel hospitals, doctors and health insurers to submit the data as “necessary to carry out the agency’s duties.”
They planned to include in the database Medicaid claims and managed care encounters, and gradually expand the repository to include private insurers’ medical, pharmacy and dental claims.
“The HCCAT provides the ability to understand how and where health care is being delivered and at what cost,” the funding request states.
But AHCA’s request was ignored by state lawmakers, and Gov. Rick Scott did not include the request in his budget proposal.