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NY Hospitals Slow To Comply With New Price Transparency Rule That Took Effect This Month
By
Caroline Lewis
Published Jan 18, 2021
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By
Caroline Lewis
Published Jan 18, 2021
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Perhaps one of the most frustrating things about the American health care system is that the cost of a common procedure, such as an MRI, can vary widely depending on which hospital someone visits and what insurance plan they have, but no one knows what the most and least expensive options are.
A new federal rule that took effect this month aims to change that by making hospital costs more transparent.
After unsuccessfully fighting the Trump administration in court to keep prices secret, hospitals are now required to publicly disclose what they charge for each service. That includes the prices they’ve negotiated with health insurers, which have previously been guarded as trade secrets, as well as the discounted “cash prices” they charge people who pay without insurance.
The biggest champions of the new transparency requirements say they have the potential to empower patients to shop for the lowest-priced services, while fostering competition among providers and lowering health care costs overall.
“Once we get to see these actual prices and hospitals have to actually compete against [each other], it’s game over for the overcharging and the price gouging and the capitalizing on patient misfortune and game on for the American consumer to be in control,” said Cynthia Fisher, founder and chairman of the nonprofit Patient Rights Advocate, which fought for the price transparency measures.
Prices could be particularly useful for patients who are uninsured or have yet to spend down the deductible on their health plans, meaning they still have to pay for care out of pocket. But they might still have to worry about unforeseen fees and charges.
Many health policy experts are skeptical that this new level of transparency will influence consumer behavior on a large scale, however.
“There is interest among a small minority of patients in price information […] but it’s unlikely, given past behavior, for patients to shop based on price,” says Anna Sinaiko, assistant professor of health economics and policy at the Harvard School of Public Health, who has researched whether and how consumers use health care cost information when it’s available.
Still, Sinaiko says, price transparency could impact health costs in other ways—for instance, by allowing employers to design lower-cost health plans for their employees. It could also help expose which hospitals or insurance plans are outliers in terms of costs.
“As you make things more public, it could very well get harder for hospitals to defend really large price variations [for the same service],” Sinaiko said.
But the impact of this unprecedented access to cost information can only be gauged if hospitals actually comply with the regulations and publish their prices--something most of the major hospital systems in New York City have been slow to do. So far, only NYC Health + Hospitals, the city’s public hospital system, appears to be in compliance with the price transparency rule, although others say they’re working on it.
The American Hospital Association, which lost its appeal challenging the rule just days before it took effect on January 1st, says there are still “considerable gaps in federal guidance” on how to meet the new requirements. It is also urging the federal government to delay strict enforcement because hospitals are already overburdened by the coronavirus.
Hospitals that don’t comply face fines of up to $300 a day. But health policy experts say some hospitals may opt to keep prices secret and risk the penalty.
“That’s a flea on an elephant financially if you’re looking at a large multi-million- or multi-billion- dollar system,” said Niall Brennan, president and CEO of the Health Care Cost Institute, which aggregates and analyzes health care claims data. “Hospitals are certainly not going to comply with this because they’re afraid of financial penalties, so we will have to rely on them to comply with it because they’re afraid of the reputational consequences.”
In order to comply, hospitals have to provide a comprehensive list of prices in a “machine-readable” format such as an Excel spreadsheet that can be downloaded off their website. They also have to provide cost information that’s easier for patients to understand for 300 common “shoppable” services that patients would be able to prepare for ahead of time, such as giving birth or getting a hip replacement.
Gothamist/WNYC searched the websites of Northwell Health, Montefiore Medical Center, NYU Langone Health, Mount Sinai Health System, and New York-Presbyterian, and found either partial or no compliance with the price transparency rule as of January 18th.
Northwell and Montefiore had sophisticated online cost estimators that appeared to comply with the “shoppable services” component of the rule but were missing the comprehensive list of prices. NYU Langone and Mount Sinai didn’t appear to meet any of the requirements. Of the private health systems Gothamist/WNYC looked at, only NewYork-Presbyterian posted any of the once-secret prices it had negotiated with insurers, and it only did so for a fraction of its services.
Gothamist /WNYC reached out to all of the health systems about their efforts to comply with the regulations, but most declined to comment. A Mount Sinai spokesperson said, “We and many hospitals are preparing and will be compliant.”
According to Richard Miller, chief business strategy officer for Northwell, the hospital network hasn't published its price list yet because it’s still seeking clarification from the federal government on how best to translate complex insurance contracts into straightforward prices for consumers.
Miller says he’s concerned that a lack of standardization in how hospitals approach the task will make it impossible for people to accurately compare prices between different systems.
“We want to make sure there’s a level playing field as hospitals expose this information,” Miller said.
If and when prices do become available on each hospital website, it will still be difficult to make price comparisons among hospitals unless someone aggregates all the information. Fisher says it’s a “great opportunity for tech innovators to come in and get access to this data and put it into mobile apps that will allow us to be able to shop just like we do for airline prices and flights.”
Elisabeth Benjamin, vice president of health initiatives at the Community Service Society of New York, says it should be the government’s job to make the information accessible.
“Let people do comparison shopping like they do now through the [Affordable Care Act insurance] exchanges,” she said. “It should be done at the federal level or, at the very least, at the state level. It should not be done hospital by hospital.”
Even if most individuals don’t make a habit of comparing prices, the data is still valuable, says Brennan of the Health Care Cost Institute. “It kind of blows the lid off one of the most closely guarded secrets in American health care and American health care is [nearly] 20% of the economy.”
Brennan added that there needs to be greater scrutiny as to why prices for the same procedure can vary so widely. “Nobody knows this,” he said. “And it’s frankly worked out just fine for the powerful actors in the system.”
Tagged
hospitals
Caroline Lewis
Caroline Lewis is on the health care beat for WNYC and Gothamist. She has covered COVID, a nurses' strike, the overdose crisis and New York’s marijuana legalization effort, and spent a year investigating patients' medical bills. She always wants to hear about how everyday New Yorkers experience the health system. Got a tip? Email [email protected].
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Gothamist is funded by sponsors and member donations
Gothamist is funded by sponsors and member donations
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