The cost of health care — from the most tangible of products and services to the most arcane high-deductible insurance policies — is relatively opaque in California’s health care system.
Comparing prices for a knee replacement, tonsillectomy or even an aspirin between hospitals is difficult and sometimes impossible because of all the variables that can have a bearing on the bottom line.
Even comparing prices for identical procedures in the same hospital is difficult.
It’s like trying to put a single price on an airplane seat. Although every passenger leaves and arrives at the same time, the cost of the ride depends on many variables — whether the seat is in first class, business class or coach and whether it was purchased directly from the airlines, through a discounter or with frequent flier miles.
The analogy to air travel ends there. When consumers shop for airline tickets, all those options are clearly spelled out. The cost of first class vs. coach is displayed. The cost of getting the ticket through Expedia or Travelocity instead of directly from the airline ticket is clearly stated.
In addition to prices, other airline information is readily available to travelers â” on-time statistics, safety records and inspection data.
That’s not the case in health care, but efforts are under way to change that.
Catalyst for Payment Reform, a coalition of large employers and others, such as CalPERS, that purchase care, has just released a brief calling for more transparency in health care pricing. The report outlines steps purchasers can take to support price transparency. A related statement calls on insurers and providers to release price data.
Parts of the Affordable Care Act support transparency, including the creation of Medicare Qualified Entities that can collect and share information with the public.
Some states have created online price transparency tools for purchasers and consumers. In New Hampshire and Maine, insured and uninsured consumers can compare prices of various medical services from multiple providers. A new online tool in Minnesota allows consumers and purchasers to see average negotiated rates for those with insurance.
In California, a new state law takes a first step toward transparency by prohibiting health insurers and providers from including “gag clauses” in contracts that forbid the disclosure of pricing information.
We asked stakeholders and experts if California should be actively pursuing pricing and performance transparency.