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A new federal law that makes hospitals post their prices online doesn’t help consumers understand what their out-of-pocket costs will be for surgeries, tests and other medical procedures, hospital officials and advocates agree.
Think of the difference between paying the sticker price for a new car and what you’ll actually pay after some haggling, or the rack rate for a night in a hotel room and what you’ll find on a travel discount site.
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“The list price may be less than what 1 percent of patients actually pay,” says Elisabeth Wynn, executive vice president of health economics and finance at the Greater New York Hospital Association. Wynn and other hospital executives say the so-called “chargemaster” price list that a new federal law requires them to post probably will just add to consumer confusion.
“Insurers negotiate off that list price,” Wynn explains. Medicare sets its own fee schedule that hospitals have to abide by, and patients who are uninsured typically negotiate with a hospital. And most hospitals have financial aid programs that can knock down the list price considerably.
“We know what concerns patients primarily is what their out-of-pocket charges will be for a procedure,” says Rich Miller, executive vice president and chief business strategy officer at Northwell Health, the largest health system in New York. Since 2010, Northwell has put a personal cost estimator on its website. Patients can list their insurance and get an estimate of their out-of-pocket costs based on what other patients with that same insurance have paid in the past. It’s not an exact estimate, Miller says, but it gives patients an idea of what they’ll have to pay.
“What we really encourage patients to do is call [the hospital],” Miller says. “They can speak to a financial counselor who can get more specific, look at their insurance plan, their deductibles and try to give the patient a much more accurate estimate.” Northwell also has a Medicare rate payment tool that does essentially the same thing by telling patients what Medicare pays for a given test or procedure.
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