Achieving the Promise of Price Transparency

Association Between Hospital Monopoly Status, Patient Socioeconomic Disadvantage, and Total Joint Arthroplasty Price Disclosure

INTRODUCTION

In recent years, healthcare institutions and regulatory bodies have enacted cost transparency mandates for routine interventions such as total hip arthroplasty and total knee arthroplasty. However, disclosure rates remain low. This study examined the effect of financial characteristics of hospitals and the socioeconomic status of patients on price disclosure.

METHODS

Hospitals conducting total hip arthroplasty/total knee arthroplasty, their quality ratings, and procedural volumes were identified using the Leapfrog Hospital Survey and linked to procedure-specific prices. Financial performance and the Area Deprivation Index (ADI) were used to correlate disclosure rates with hospital and patient characteristics. Hospital financial, operational, and patient summary statistics were compared by price-disclosure status using two-sample t -tests for continuous variables and Pearson chi-square test for categorical variables. The association between total joint arthroplasty price disclosure and hospital ADI was further evaluated using modified Poisson regression.

RESULTS

A total of 1,425 hospitals certified by the Centers for Medicare & Medicaid Services were identified in the United States. 50.5% (n = 721) of hospitals had no published payer-specific price information. Hospitals in an area of higher socioeconomic disadvantage were more likely to disclose prices of total joint arthroplasty (incidence rate ratio = 0.966, 95% CI: 0.937 to 0.995, P = 0.024). Hospitals that were considered monopolies or were for-profit were less likely to disclose prices (IRR = 1.15, 95% CI: 1.030 to 1.280, P = 0.01; IRR = 1.256, 95% CI: 0.986 to 1.526, P = 0.038, respectively). When accounting for both ADI and monopoly status, hospitals with patients who had a higher ADI were more likely to disclose costs for a total joint arthroplasty, whereas for-profit hospitals or hospitals considered monopolies in their HSA were less likely to disclose prices.

DISCUSSION

For nonmonopoly hospitals, a higher ADI correlated with a higher likelihood of price disclosure. However, for monopoly hospitals, there was no significant association between ADI and price disclosure.

LEVEL OF EVIDENCE

II.

Concordance of Disclosed Hospital Prices With Total Reimbursements for Hospital-Based Care Among Commercially Insured Patients in the US

Importance

To improve health care price transparency and promote cost-conscious selection of health care organizations and practitioners, the Centers for Medicare & Medicaid Services (CMS) required that hospitals share payer-specific negotiated prices for selected shoppable health services by January 2021. While this regulation improves price transparency, it is unclear whether disclosed prices reflect total costs of care, since many hospital-based services are delivered and billed separately by independent practitioners or other health care entities.

Objective

To assess the extent to which prices disclosed under the new hospital price transparency regulation are correlated with total costs of care among commercially insured individuals.

Design, Setting, and Participants

This cross-sectional study used a large database of commercial claims from 2018 to analyze encounters at US hospitals for shoppable health care services for which price disclosure is required by CMS. Data were analyzed from November 2020 to February 2021.

Exposures

Whether the service was billed by the hospital or another entity.

Main Outcomes and Measures

Outcomes of interest were the percentage of encounters with at least 1 service billed by an entity other than the hospital providing care, number of billing entities, amounts billed by nonhospital entities, and the correlation between hospital and nonhospital reimbursements.

Results

The study analyzed 4 545 809 encounters for shoppable care. Independent health care entities were involved in 7.6% (95% CI, 6.7% to 8.4%) to 42.4% (95% CI, 39.1% to 45.6%) of evaluation and management encounters, 15.9% (95% CI, 15.8% to 16%) to 22.2% (95% CI, 22% to 22.4%) of laboratory and pathology services, 64.9% (95% CI, 64.2% to 65.7%) to 87.2% (95% CI, 87.1% to 87.3%) of radiology services, and more than 80% of most medicine and surgery services. The median (IQR) reimbursement of independent practitioners ranged from $61 ($52-$102) to $412 ($331-$466) for evaluation and management, $5 ($4-$6) to $7 ($4-$12) for laboratory and pathology, $26 ($20-$32) to $210 ($170-$268) for radiology, and $47 ($21-$103) to $9545 ($7750-$18 277) for medicine and surgery. The reimbursement for services billed by the hospital was not strongly correlated with the reimbursement of independent clinicians, ranging from r = -0.11 (95% CI, -0.69 to 0.56) to r = 0.53 (95% CI, 0.13 to 0.78).

Conclusions and Relevance

This cross-sectional study found that independent practitioners were frequently involved in the delivery of shoppable hospital-based care, and their reimbursement may have represented a substantial portion of total costs of care. These findings suggest that disclosed hospital reimbursement was usually not correlated with total cost of care, limiting the potential benefits of the hospital price transparency rule for improving consumer decision-making.

Price Transparency in Radiology-A Model for the Future

Medicine is the only business transaction in which consumers make important purchase decisions without knowing how much they have to pay. Lack of price transparency in health care imposes financial burden and anxiety among patients as the cost of health care has been shifting from employers to patients through high-deductible health plans (HDHPs). Health economists and policymakers anticipated that HDHPs with price transparency would be a catalyst for patients to "shop" for low-price providers, thus reducing overall health care spending. For patients to shop health care services, price transparency is a requisite. The Department of Health and Human Services mandate of publicly disclosing the hospital chargemaster and state legislatures demanding greater health care price transparency are just two examples of external forces challenging the long history of price opacity in health care. Imaging, pharmacy, laboratory tests, and ambulatory surgeries are considered potentially shoppable health care services. This article examines the intended motivation of price transparency, the limitations of current price transparency tools, and what impact price transparency may have on radiology. We share our experience in developing and implementing University of Utah's online interactive price transparency tool to estimate patients' out-of-pocket expenses.

Poor Cost Awareness Among Anesthesia Providers for Medications, Supplies, and Blood Products

BACKGROUND

The objective of this study was to determine if anesthesia providers can accurately estimate the cost of commonly used medications, supplies, and blood products.

METHODS

This study was conducted between April and June 2019 at an academic tertiary care hospital. Anesthesia providers (certified registered nurse anesthetists [CRNAs], residents, and fellows/attendings) were surveyed on their knowledge of the cost of commonly used therapies. Items were sorted into 12 categories: opioids, non-opioid analgesia, vasopressors, hypertension medications, antibiotics, neuromuscular blockers, reversals, anesthetics, supplies, kits, blood products, and blood-related products. Estimates were considered to be accurate if the median cost differed from the average wholesale price by < 25%, moderately inaccurate if between 25% and 50%, and severely inaccurate if by > 50%.

RESULTS

A total of 107 surveys (CRNAs: 25, residents: 36, fellows/attendings: 46) were returned. The percentage of total items accurately estimated for cost was low (22% for all providers), and was not different between provider types (27% for CRNAs, 23% for residents, 20% for fellows/attendings; p = 0.69). The percentage of items with severe inaccuracies in cost estimation was high and was not different between provider types (56% for CRNAs, 60% for residents, 50% for fellows/attendings; p = 0.53). Rates of under- and overestimation varied widely, with greatest underestimation for vasopressors and blood-related products, and greatest overestimation for non-opioid analgesia and antibiotics. Low- and high-cost category items tended to be overestimated and underestimated, respectively (p < 0.0001).

CONCLUSION

The majority of anesthesia providers have poor knowledge of cost. These findings suggest that cost awareness interventions may be necessary for promoting high-value health care.