When you think about the fact that you have no idea how much a medical procedure is going to cost until after the fact, it’s even more appalling that financial responsibility is falling more and more to patients. Everyone else knows pricing ahead of time: providers, insurance companies, government agencies. Only you, the patient, are in the dark until the bill arrives.
Spectrum Health in Michigan is one of the latest hospital organizations to post inpatient, outpatient and diagnostic procedure costs for their three hospitals. You can actually look up costs ahead of a scheduled procedure. Why is this important? Because it allows you to get a jump on how much of the family budget is going to be used to pay the patient’s portion of the medical services you will be receiving.
One of the reasons not to post prices that I have heard repeatedly is that providers don’t know what the cost will be until after the procedure. Oh, come on! Give me an average cost and let me in on the secret. Spectrum Health provides Medicare, Medicaid and Estimated Private Health Insurance estimated costs for inpatient diagnostic related groups or DRGS. There are over 900 DRGS used by hospitals. At My Health and Money we’ve licensed self-reported hospital data on over 20 different types of inpatient procedures at over 5,000 hospitals to give patients a quick peak at what their bills may look like based on a geographic area. It also shows consumers how variable costs can be in health care. Consumers can easily compare pricing at different facilities, and potentially make a decision with their doctor on where to have a procedure based on both quality and costs.
Not many of us are going to hold hospitals to average cost estimates, but they are useful in formulating a budget for an ongoing health condition or even putting aside dollars to cover non-emergency events. None of us has a picture of high/low rates in health care. In fact, most of us think all rates are high. But after looking through our website data, I would say some of the prices are actually very reasonable for the types of medical services being delivered.
Having hospitals post prices is a good step in educating consumers about costs, and in transforming the health care industry into a transparent consumer marketplace. The market can never successfully drive down costs if we don’t have access to the information needed to determine our willingness to pay or not. This is called consumer choice. We should applaud Spectrum Health and other providers like them who aren’t afraid to drop the veil of secrecy.
