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Shining Light on Medical Prices

Ilana Novick

If we comparison shop for clothes and cars, why can't we do the same for something as serious as prices for the most common medical procedures? Until very recently, these prices were a closely guarded secret, secluded in a unwieldy, outdated government database that interested researchers had to pay to access. This secrecy has a variety of consequences for all Americans, but particularly the uninsured.

In May, the Obama administration made a step in the direction of transparency and accountability when they released the costs of the 100 most common in-patient services and the 30 most common outpatient services across the country. The data revealed vast disparities between single procedures, sometimes even within the same city. For example, as the Washington Post noted, one hospital in Miami charged $166,174 for a patient with a major heart attack that required four stents. Another hospital charged $89,027 for the same procedure. 

North Carolina is now taking this transparency trend even further. Gov. Pat McCrory signed legislation last week that will require hospitals to publish the prices that they negotiate with insurers. This will potentially make comparison-shopping for consumers even more useful for North Carolinians. Sarah Kliff in the Washington Post's Wonkblog points out that the initial prices that the hospitals were reluctant to release are sticker prices, which insurance companies usually negotiate to lower. The data that North Carolina will make public is the actual amount that hospitals end up charging health plans for their services. Starting in June of 2014, all of this information will be on North Carolina Department of Health and Human Services website.

As Kliff points out, the need for this information is stronger than ever, considering that employers are asking employees to take on a bigger share of their health insurance premiums in the form of larger deductibles.  

Both the federal legislation and North Carolina’s new policy are much more helpful for procedures that can be scheduled and planned in advance. It also can't separate the relationship between procedure price and quality. If someone who is uninsured and has a sudden heart attack, how can they ensure that the hospital they are rushed to is the one that is both the best place for their procedure they need as well as one he or she can afford?

Transparency and data are important first steps for increasing consumer power and giving Americans more control over their medical care,  but we still have a long way to go when it comes to expanding access to affordable medical care.