Pricing Cars Like Healthcare
By Debra Gordon, MS
Imagine if we bought cars like we buy medical procedures. You wouldn’t be able to go online to research the car and learn about its safety profile, gas mileage, or resale value. You also couldn’t compare prices between dealers online. Instead, you’d have to call each dealer and ask for the price. About half would tell you they can’t share that information due to contractural relationships with the car manufacturer. Another third would say they simply don’t know. The others would quote you prices ranging from $20,000 to $200,000 for the same car.
Welcome to the wacky world of healthcare. It’s hard to comprehend that in this day of patient-centered care, patient engagement, and consumer-directed health plans (in which it’s assumed that since our deductibles are so high we’ll comparison shop for the cheapest price) that there are still such wide disparities in prices and that consumers have such a difficult time learning what they are.
You don’t have to take my word for it. In a study recently published in the Journal of the American Medical Association-Internal Medicine, researchers asked 20 top-ranked hospitals and 102 non-top-ranked hospitals around the country to provide a bundled price for an elective hip replacement for a 62-year-old woman who planned to pay for the procedure herself.
Just nine of the top-ranked and 10 of the non-top-ranked hospitals could provide such a price, while three and 16, respectively, could not (or would not) provide any price. The authors were able to obtain a complete price for another 47% of hospitals when they contacted the hospital and healthcare provider separately.
And the price? Anywhere between $12,500 to $105,000 for the top-ranked hospitals and $11,100 to $125,798 for the non-top-ranked hospitals.
Um, I think I see a problem with healthcare reform initiatives such as pricing transparency, bundled payments, and accountable care organizations.
Such pricing disparities and secretiveness about cost is unacceptable in a world in which I can go onto the Internet and within two minutes compare the cost of a leather coat across 10 vendors. It also unacceptable given the findings of a recent study that examined how transparency around costs and quality affects consumer choice in health care. As the authors wrote: “Consumers who received strong and clear information on quality alongside cost data were more likely to choose high-value providers that offer high-quality care at lower costs.”
But how can I choose when I can’t even find out the price tag, let along information about quality and outcomes? Healthcare reform, you’ve got a long way to go, baby.
Debra Gordon, MS, is an independent healthcare communications consultant who specializes in clinical and healthcare policy. You can learn more about her at www.debragordon.com.