Consumers with health insurance shouldered more of the expense for their medical care in 2014, but Florida and nearly every other state did little to require that prices for hospitals and doctors be made public — hindering comparison shopping and allowing dominant hospital systems and insurers to drive up costs overall, according to a report released Wednesday.
Florida was among 45 states that received a failing grade for neglecting to adopt laws that give patients the data they need to plan for their healthcare expenses, according to the report produced by two nonprofit groups, Catalyst for Payment Reform in California and the Health Care Incentives Improvement Institute in Connecticut.
The report looked only at state actions regarding healthcare price transparency, and not at the increasing number of health insurance companies that offer their members online tools to estimate out-of-pocket costs for medical care, such as Cigna and UnitedHealthcare.
State legislative efforts, however, could help to create a uniform experience for all consumers, whether they have insurance or not, said Suzanne Delbanco, executive director of Catalyst for Payment Reform.
“A consumer needs to be able to plan financially,” Delbanco said, “and to do that they need as accurate an estimate as possible about how much it’s going to cost them.”
That out-of-pocket cost is going to depend on the insurance plan, the procedure needed, the hospital and other factors, such as patient condition.
Florida’s Agency for Health Care Administration, or AHCA, maintains a website, floridahealthfinder.gov, that provides average charges for specific procedures and allows consumers to compare hospitals and other providers.
But averages don’t enough enough specific information for consumers to plan their finances, Delbanco said, and charges are unreliable because no one actually pays those prices. Instead, health insurance companies negotiate steep discounts on charges by promising to steer members to the contracted hospitals and doctors.
Delbanco noted that legislative efforts to pull the back the curtain on contracted prices often meet resistance from hospitals, physicians, insurers and other suppliers who raise what she called “spurious arguments” about trade secret protections and contractual obligations.
For instance, hospitals and insurers often sign non-disclosure agreements or gag clauses requiring that both parties keep contracted rates confidential. Other contracts prevent insurers from creating incentives for their members to choose lower-priced options, or they prohibit a hospital from giving a more favorable price to any other insurer.
The report recommends addressing such contractual issues, citing some states, such as California, that banned gag clauses on cost information in contracts between insurers and all healthcare providers, including hospitals and doctors. But similar legislative efforts have failed elsewhere, most recently in Missouri in 2014.
Florida has enacted numerous statutes over the years requiring doctors, hospitals and other medical facilities to report estimates and charges to the state, and insurers to report data on claims. But those statutes exempt providers and insurers from disclosing contracted rates, resulting in information that Delbanco says is too unwieldy and unreliable for consumers to act upon.
What’s more, despite legislative efforts in Florida and elsewhere, it is not entirely clear what role such disclosure has played in reducing healthcare spending or changing consumer behavior.
This year, Florida’s governor and Legislature took a different tack to lowering healthcare costs: proposing a package of bills intended to create more competition among healthcare providers, and to increase choices for consumers.
Among the proposals were removing the requirement for a state-issued “certificate of need” before building or expanding a hospital, loosening limits on patient stays at surgical centers, and allowing advance registered nurse-practitioners and physician assistants to prescribe controlled drugs.
Gov. Rick Scott also created the Commission on Healthcare and Hospital Funding to scrutinize public funding of healthcare and hospital profits. The commission, which convenes next at Miami Dade College on July 23, has held five meetings.
Members of the commission have discussed the lack of price transparency and even suggested fixed pricing for some hospital services, but it is unclear what recommendations the board will make or whether the governor or Legislature will act on them.
With an estimated 1.4 million Floridians enrolled in health plans under the Affordable Care Act, and many of those plans requiring high deductibles, consumers increasingly need the ability to find and use reliable healthcare price information.
A study published this week in the journal Health Affairs found that while millions of Americans gained health insurance coverage in 2014, many of those consumers struggled with high out-of-pocket expenses that caused them to forgo non-emergency care.
Delbanco acknowledged that states have a ways to go to help consumers budget personal medical expenses, especially given that only one state achieved the top rating in the price transparency report: New Hampshire, which created a website that allows insured and uninsured residents to estimate their healthcare costs.
“It's always a long process to completely change what is considered to be a norm,’’ she said. “There’s no question that price transparency will be the norm. It's a matter of time.”