01/11/2019

On New Hospital ‘Chargemasters,’ The Price Probably Isn’t Right

5:01 minutes

up close shot of calculator and pen for calculating
Credit: Pixabay

Starting January 1, 2019, hospitals have been required to post online a machine-readable list of detailed prices for materials and procedures—from the cost of an overnight stay in a hospital bed, to a single tablet of Tylenol, to the short set of stitches you get in the emergency room. The new requirement is a Trump administration expansion of Obama-era rules growing out of the Affordable Care Act, which required that this list of prices be made available upon request.

But while the increased availability of this pricing information might seem like a win for consumers, it’s not actually all that useful in many cases. First, the price lists don’t give a simple number for common procedures, but break down each part of every procedure item by item, in no particular order, and labeled with acronyms and abbreviations. Second, the price lists, called ‘Chargemasters,’ are the hospital equivalent of the car sticker price—they represent what the hospital would like to be paid for a service, not the price that most consumers actually do pay, or the prices that may have been negotiated by your insurance company. Julie Appleby, senior correspondent at Kaiser Health News, joins Ira to explain what the price lists actually show, why they matter, and what consumers might be able to do to get a better estimate of potential health care costs.

Further Reading

  • Read Julie Appleby’s original article about Chargemasters in Kaiser Health News. 
  • Check out an example of a Chargemaster from Mount Sinai Hospital in New York City.
  • Sites like Fair Health and Health Care Blue Book collect data on what insurance companies actually paid for specific procedures in your region, and may be able to provide a more accurate estimate.

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Segment Guests

Julie Appleby

Julie Appleby is a senior correspondent with Kaiser Health News in Washington, DC.

Segment Transcript

IRA FLATOW: Now it’s time to play “Good Thing, Bad Thing.” 

[MUSIC PLAYING] 

Because every story has a flip side. Now, if you’ve ever been shocked by your hospital– you know, you look and you see the jaw-dropping prices they’ve charged you when you got out. There’s good news and bad news. 

Since the start of the new year, hospitals have been publishing detailed lists of prices for materials and procedures online, from the cost of an overnight stay in a hospital bed, to that giant price on a single tablet of Tylenol, to the short set of stitches you get in the emergency room, right. 

But there is a catch. Joining me now to talk about it is Julie Appleby, senior correspondent at Kaiser Health News in Washington. Welcome to the program. 

JULIE APPLEBY: Hi, Ira. 

IRA FLATOW: So that’s the good news here, is that we can see what they’re charging us. 

JULIE APPLEBY: That’s the good news. Hospital charges are now available online, whereas before you might have to ask for them. 

IRA FLATOW: And what does a charge look like, when you look it up? 

JULIE APPLEBY: So these are things called “charge masters.” And they’re basically that these long, sort of a-la-carte lists of every good and service that a hospital offers, right. 

So it’s a list. And hospitals are putting them up online in generally Excel format. So they’re basically these long lists of all the things they offer. 

And it can be a little confusing, because they’ll put some things in fairly easy to understand information, like a per-day room charge. But then they’ll have some things that are in medical abbreviations that are really hard to understand. 

IRA FLATOW: So that’s the bad news here, is that you can read it but you may (CHUCKLING) not understand it. 

JULIE APPLEBY: Yeah. And basically, the other bad news is it’s not useful for most consumers most of the time, because they don’t pay those charges. 

IRA FLATOW: They don’t? What do they pay? 

JULIE APPLEBY: Yeah. Well, most patients who have insurance, for example, their insurers have negotiated discounts off those charges. So they’re not paying those prices. 

Where folks who are affected by these prices are the folks who are uninsured, or if you go to a hospital where you’re out-of-network and you then get a bill later– and this is where people are often surprised– your insurer pays a portion towards that bill. But then you might be responsible for the difference between that and these charges. 

And that’s the other folks that might pay it. They might be hit for the difference between what their insurer paid and for the charges if they’re out-of-network. 

IRA FLATOW: I have been there, done that. I know exactly how that feels. So this list won’t tell you how much a hip replacement is. It’ll tell you how much each bit of the procedure costs. 

JULIE APPLEBY: Right, it’s sort of like an a-la-carte menu, right. 

IRA FLATOW: Yeah. 

JULIE APPLEBY: You Would have to assemble the whole meal, so to speak. So you would have to know how many stitches you’re going to get, how many folks are going to be working on your operating room, and all kinds of things. What kind of drugs are you going to get? So it’s almost impossible for a person to figure it out. 

Now that said, some hospitals are also posting sort of bundles of payments that are based on groups of coverage. So the whole thing, how much would the whole thing cost you? 

And that’s an average. So that might be a little bit more useful. But just the a-la-carte list itself could be very difficult to try to figure out how much something is going to cost. 

IRA FLATOW: So what’s a consumer to do? Is there any way to get a better sense then of the real pricing? 

JULIE APPLEBY: Well, these can be useful. So it might be a starting point. Like, if you were uninsured, you might want to look at this to see if there’s a difference in your local hospitals if you have a service you know that’s coming up that’s elective. 

I mean, remember, a lot of times you’re being hauled to the hospital in an ambulance, right. So you’re not going to do any shopping. 

But a consumer who has insurance, their first stop should be with their insurer. Call them up and ask them, where are you at in your deductible? How much have you paid this year? How much might this procedure cost? What will be my share of it? So that’s one place to start. 

If you are uninsured or if you end up in that out-of-network thing, it’s a little bit more difficult. You could look at these as charges. 

And then you can go on some other websites. There’s a website called Health Care Blue Book, for example. There’s something called Fair Health. You can type in the name of the procedure or if you have the code you can look it up. And there you’re going to get sort of an average of what insurers pay towards these types of procedures. 

Now, it’s not going to be individual to you. It’s not going to be necessarily specific to a hospital. It’ll be more like an average price paid in a region. 

But it would give you some idea so that when you go back– and you might have to negotiate to try to get a discount off what the hospital’s charging you– you might have an idea of what private insurers pay. 

IRA FLATOW: It’s sort of like buying a car– a used car. 

JULIE APPLEBY: It’s a little bit like that– 

IRA FLATOW: (CHUCKLING) Yeah. 

JULIE APPLEBY: –only more confusing. 

IRA FLATOW: More confusing. Thank you. Thank you, Julie. 

JULIE APPLEBY: Thank you. 

IRA FLATOW: Julie Appleby, senior correspondent at Kaiser Health News in Washington. And before you ask, Kaiser Health News is not affiliated with the Kaiser Permanente hospital chain. 

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