No one argues it would be too burdensome for Wal-Mart to post prices on the products that line its aisle, so why can’t health care providers be expected to do the same?
That’s a question posed by Jesse Ellis O’Brien, a health care advocate with the Oregon State Public Interest Research Group, or OSPIRG, Foundation, a Portland-based consumer advocacy group.
“I don’t see that it’s fundamentally all that different,” he said.
OSPIRG is advocating for a proposal in the Oregon Legislature, Senate Bill 891, that would require licensed health care providers in the state to post on their websites and in their facilities charges for their most common health care services. Upon request, they would also have to provide cost estimates to prospective patients.
The measure is very similar to another before the legislature, Senate Bill 900, also aimed at price transparency. This one, however, would take a different approach: Rather than having providers post the information, state officials would aggregate data from insurers onto a single website.
As patients are saddled with higher deductibles and co-pays on their insurance policies, transparency advocates say knowing what a procedure will cost ahead of time is becoming increasingly important. That’s especially true given the dramatic variation in cost depending on where you’re located and which provider you choose. An OSPIRG analysis, for example, found that a hospital in the McMinnville area charged for some services four times that of hospitals in the Portland metro, Ellis O’Brien said.
“If the people going to that hospital could see those prices posted in advance, they might realize they can get a much better deal by just driving for a half an hour or whatever it is,” he said.
Members of the Senate’s health care committee will debate both bills at a March 25 hearing.
Some research has shown that increasing price transparency can cut health care waste, which the Institute of Medicine estimates amounts to $105 billion annually. Patients in 2012 who were given price estimates before choosing where to receive mammograms saved an average of $220 per test, or nearly 19 percent of the cost of the test, according to an August 2014 article in Health Affairs.
The problem is, the cost of health care can be tremendously complex, making price transparency far from simple.
Polling by the Oregon Association of Hospitals and Health Systems has shown that most importantly, those with health insurance — now about 95 percent of Oregonians — want to know what they’re going to pay out of pocket after their insurance carrier picks up its portion of the bill, said OAHHS CEO Andy Davidson.
To that end, his organization, which represents most hospitals and health systems in Oregon, supports Senate Bill 900, which would require the Oregon Health Authority to organize existing data insurers contribute to Oregon’s All Payer All Claims database, onto a new, consumer-friendly website. That database currently includes all claims paid by health insurers, but does not publicly contain information about individual providers. The measure calls for the information to be broken down by provider, Davidson said.
For those without insurance, Davidson said OAHHS members have committed to voluntarily providing good-faith estimates of what procedures are going to cost, outside of the legislation.
“We felt that it was far better to do that on a voluntary basis, collectively, with broad support from the industry, than it is to have folks create a mandate to do that,” he said.
Senate Bill 891, by contrast, would call upon licensed health care facilities to post online and in-house their contracted rates for common procedures with about 10 commercial health insurers plus Medicare, Medicaid and state-run public plans. The measure would apply to hospitals, health systems and community clinics, but not long-term care facilities or, in most cases, individual doctor’s offices, Ellis O’Brien said. They would also have to provide upfront cost estimates to patients who asked for them, including facility fees and physician fees.
Even cost estimates from providers don’t always reflect what patients will pay, said Nicole Kohleriter-Perelman, director of communications and special projects for the Catalyst for Payment Reform, a nonprofit that works to improve the payment system for health services. A report her organization released last month found in some cases, post-procedure costs, such as rehabilitation, can cost as much as 30 percent of the total cost. Providing an accurate cost estimate requires providers to look at other costs commonly associated with procedures, Kohleriter-Perelman said.
“It’s about being thoughtful upfront and giving the consumer as much information as possible about the care they’re likely to need for that condition so that they can really get a full picture,” she said.
Oftentimes, contracts between insurers and providers contain provisions that prevent rates from being shared, but Senate Bill 891 contains a provision that would nullify those.
Such provisions, called nondisclosure clauses, have proven to be significant barriers to price transparency nationwide, Kohleriter-Perelman said.
“If Oregon could do that, I would say that would be very impressive,” she said.
From the consumer standpoint, both measures represent “ideal” scenarios, Kohleriter-Perelman said. Catalyst for Payment Reform prefers centralized websites, however, which make comparison shopping simpler, she said. It also supports the use of APAC data in price transparency efforts because it shows what insurers actually paid compared with what hospitals charge, which is less meaningful.
In Davidson’s mind, Senate Bill 891 is far too burdensome for providers and doesn’t display information in a consumer-friendly fashion. But Ellis O’Brien said it’s important that the information come from providers themselves, because it will keep the conversation between providers and patients.
“We think it will actually strengthen the doctor-patient relationship,” he said, “and enable consumers to start having more meaningful, frank, upfront conversations with their health care providers about cost and value.”
— Reporter: 541-383-0304,