August Editorial

By —Elizabeth Wood | August 1, 2013

Data on inpatient and outpatient hospital charges released in May and June by the Centers for Medicare and Medicaid Services (CMS) have fueled the fire started in March with Steven Brill’s Time magazine cover story, “Bitter Pill: Why Medical Bills Are Killing Us.” Brill cited sometimes staggering amounts charged for items such as acetaminophen or chest x-rays, and the CMS data found significant pricing discrepancies among the more than 3,000 hospitals and 30 hospital outpatient charges examined.

Reports like those from CMS reflect the Obama administration’s efforts to improve transparency of prices for health services and thus help consumers make more informed decisions. But some researchers argue that the information available isn’t really useful.

In a study of 62 publicly available state websites with price information, researchers at the VA Center for Clinical Management Research and the University of Michigan found that most sites reported billed charges but did not show what patients were expected to pay. CMS’s Hospital Compare website (www.medicare.gov/hospitalcompare) has been offering information since 2005, and other websites have emerged in the past decade, but “we’re still not reporting the key information patients need to maximize the value of their health care spending,” said lead author Jeffrey T. Kullgren, MD, MS, MPH. He and his colleagues recommend reporting allowable charges for full episodes of care (ie, including facility, professional, and other fees).

One website cited as a positive example is the New Hampshire HealthCost website (www.nhhealthcost.org), which gives patients an estimate of health care costs at facilities in their community based on their health insurance plan. OpsCost (www.opscost.com), a new website that compares what hospitals billed Medicare vs what Medicare paid for certain procedures at various locations, had some 15,000 visitors during its first week, says cofounder George Kalogeropoulos.

Others are jumping on the bandwagon: The Arizona state health department recently announced the launch of an online hospital comparison tool that’s based on 2011 discharge information (www.azdhs.gov/plan/crr/crrreports/az-hospital-compare.htm), and the Robert Wood Johnson Foundation (www.rwjf.org) has planned a competition for web developers to build digital products to facilitate comparisons for consumers.

With the proliferation of websites and other tools designed to enhance comparison shopping, there will be ever greater pressure on hospitals to make pricing information publicly available. This is no small feat, as evidenced by this month’s revenue cycle column (see p 24) on coding and charge capture—a complex and laborious process. As if it’s not daunting enough to understand your own hospital’s pricing structures, you also have to think about how those costs are measured against what other hospitals are charging.❖


Brill S. Bitter Pill. Time, March 4, 2013, pp 16-55.

Kullgren J, Duey K A, Werner R M, A census of state health care price transparency websites. JAMA. Published online June 18, 2013.



Receive the latest avionics news right to your inbox