Shots - Health News
3:41 am
Wed February 19, 2014

Elusive Goal: A Transparent Price List For Health Care

Originally published on Wed February 19, 2014 7:37 am

Coffee is important to many of us, but let's say your coffee maker breaks. Finding a new one is as easy as typing "shop coffee maker" into your browser. Voila — you've got models, prices and customer reviews at your fingertips.

But say you need something less fun than a coffee maker — like a colonoscopy. Shopping for one of those is a lot harder. Actual prices for the procedure are almost impossible to find, and Bob Kershner says there's huge variation in cost from one clinic to the next.

"You see the range is from $2,800 down to just about $400," he says, pointing to a computer screen displaying some colonoscopy prices in Denver.

Kershner works for a nonprofit called CIVHC, which is starting to make health care prices publicly available in Colorado. His boss, Edie Sonn, says knowing prices can change the whole health care ball game.

"Knowledge is power," she says. "None of us have had much information about how much health care services actually cost, and how much we're getting for our money." A database that includes all health claims in a particular state, she says, "gives you that information, so you can become an empowered consumer."

Colorado is one of eleven states that are starting to make public a lot of health care prices. It's taken years. An "all payer claims database" is the first step in Colorado. It's basically a giant shoebox that aims to collect a copy of every receipt for a health care service in a given state. Since doctors and hospitals generally don't tell people how much services cost beforehand, the best way to figure out the price is to get receipts from the parties that pay the bills: insurance companies, Medicaid and Medicare, mostly.

The more such information is made public, Sonn says, the more people will "vote with their feet" and migrate away from high-cost providers.

However, turning this information about price from eye-crossing rows in a spreadsheet into consumer-friendly formats is hard. Colorado's effort has taken years. Laws had to be passed to get insurance companies to send in their claims data (the receipts for what they're paying), and sorting through all the information is a lot tougher than organizing a pile of paper receipts in a shoebox.

"Claims data is dirty," says Sonn. "It's really dirty. It takes a lot of scrubbing to make sense of it. It's complicated, time consuming and expensive."

Colorado has had funding to do that from private grants, but those are drying up. In order to keep on making basic price information accessible to the public for free, the state wants to sell more complicated, custom data reports to businesses within the health industry.

There is a growing market for those sorts of reports, says Dr. David Ehrenberger, the chief medical officer for Avista Adventist hospital, outside Denver. He would like to see reports that show not just how much his competitors are charging, but also whether their patients have more or fewer complications. That would give him better negotiating power with big insurance companies.

"The insurance industry still has a dramatic advantage over, particularly, smaller physician groups and smaller health care organizations. There's not a level playing field there," Ehrenberger says.

That's because big insurance companies pay bills at hospitals all over the state, so they have a big picture view of how much everybody charges for procedures, and of details such as complication rates. Individual hospitals only know their own prices. It's as if only customers could get a list of prices for different coffee makers, but Cuisinart and Mr. Coffee couldn't, so they wouldn't know if they were asking too much or too little for their coffee makers. The better view Ehrenberger can get of the entire marketplace for health care services, the better he can set prices.

"What we want to do is be able to have the data that shows, unequivocally, that we can provide a better quality product — and [at] a cost they can afford," he says.

But there's a glitch. In order to get the kinds of reports Ehrenberger and other health care providers want, they have to include price information from all payers, and one of the biggest is Medicare — it pays about a fifth of all health care bills in Colorado. At the moment, Edie Sonn explains, they cannot use that Medicare data in any of the custom reports they want to sell.

"Current federal law restricts what we can do with that Medicare data," she says. "The only thing you can use their data for is public reporting."

Sonn's organization and others like it have found support on Capitol Hill to let them sell Medicare data. It turns out that Democrats and Republicans agree that price transparency is key to controlling costs. A measure that would make that change is now part of a bigger Medicare bill (find it in section 107) working its way through Congress. If it passes, Colorado will be one step closer to making shopping for health care as easy as shopping for a coffee maker.

This story is part of a partnership between NPR and Kaiser Health News.

Copyright 2014 NPR. To see more, visit http://www.npr.org/.

Transcript

STEVE INSKEEP, HOST:

It's MORNING EDITION from NPR News. I'm Steve Inskeep.

RENEE MONTAGNE, HOST:

And I'm Renee Montagne.

Coffee, as we have reminded you so often, is important here at MORNING EDITION. But our coffeemaker has broken so I'm going to just hop online here to shop coffee makers.

(SOUNDBITE OF KEYBOARDING)

MONTAGNE: Oh, OK. Cuisinart for 35.99, customers give that one about three stars. And of course, there's the old standby Mr. Coffee - it's only 14.99.

So it's pretty easy to get a sense of the market for coffeemakers. But here's the thing - if you're shopping for a health care procedure, consumers just don't have access to basic information about price and quality.

Our next story is about how some states are trying to change that. But their efforts are in jeopardy, as Eric Whitney reports.

ERIC WHITNEY, BYLINE: Let's say you need something less fun than a coffeemaker, like a colonoscopy. How much difference could there be in the price for one of those from one clinic to the next? Actually, quite a bit. Bob Kershner has a list of some colonoscopy prices in Denver, where he's based.

BOB KERSHNER: You see the range is from $2,800 down to just about 400.

WHITNEY: Kershner works for a nonprofit called CIVHC, which is starting to make health care prices publicly available in Colorado. His boss, Edie Sonn, says knowing prices can change the whole health care ballgame.

EDIE SONN: Knowledge is power. And none of us have had much information about how much health care services actually cost, and how much we're getting for our money. And an all-payer claims database gives you that information.

WHITNEY: An all-payer claims database is basically a giant shoebox that collects a copy of every receipt for a health care service in a given state. Since doctors and hospitals generally won't tell people how much services cost, up front, the best way to figure it out is to get receipts from the places that pay the bills: insurance companies, Medicaid and Medicare, mostly.

The more that information is public, Sonn says, the more people will gravitate away from high-cost providers.

SONN: It's market forces, it's payers and purchasers voting with their feet.

WHITNEY: Colorado's effort to make a lot of health care prices public has taken years. Laws had to be passed to get insurance companies to send in their claims data - basically, the receipts for what they're paying; and sorting through all that data is a lot tougher than organizing a pile of paper receipts in a shoebox.

SONN: Claims data is dirty. It's really dirty. It takes a lot of scrubbing to make sense of it. It's complicated, time-consuming and expensive.

WHITNEY: Colorado has had funding to do that from private grants, but those are drying up. In order to keep on making basic price information available for free to the public, they want to sell more complicated, custom data reports. And there's definitely a market for those.

Dr. David Ehrenberger works for Avista Adventist Hospital outside Denver. He wants very detailed reports that can reveal not just how much his competitors are charging, but also whether their patients have more or fewer complications. That'll give him better negotiating power with big insurance companies.

DR. DAVID EHRENBERGER: The insurance industry currently still has a dramatic advantage over particularly smaller physician groups, smaller health care organizations. There's not a level playing field there.

WHITNEY: That's because big insurance companies pay bills at hospitals all over town. So they have a big-picture view of how much everybody charges for procedures, and who does them with low complication rates. But individual hospitals only know their own prices, and not how they compare to others. The better picture Dr. Ehrenberger has of the marketplace for health care services, the better he can set prices.

EHRENBERGER: What we want to do is be able to have the data that shows, unequivocally, that we can provide a better quality product at a cost that they can afford.

WHITNEY: In order to get the kinds of reports Ehrenberger needs, they have to include price information from all payers. And one of the biggest is Medicare, which pays about 20 percent of all health care bills in Colorado. And at the moment, there's a glitch with that, says Edie Sonn.

SONN: Current federal law restricts what we can do with that Medicare data. The current federal law just says the only thing you can use our data for is public reporting.

WHITNEY: Sonn's organization, and others like it, have found support on Capitol Hill to let them sell Medicare data. A measure making the change is now part of a bigger Medicare bill working its way through Congress. If it passes, shopping for health care could eventually be almost as easy as shopping for a coffeemaker.

For NPR News, I'm Eric Whitney. Transcript provided by NPR, Copyright NPR.