Hospital Price Lists Are Being Offered

Savvy consumers know research is key to getting a good deal on big-ticket items. It works for cars -- but will it work for gastric bypass surgery?

Golden, Colo.-based Health Grades Inc. launched a service this week that allows consumers to research the average costs of 55 hospital procedures. The company touts its service as a Kelley Blue Book of healthcare, comparing itself to the popular guide for car buyers.

At the same time, the Bush administration reportedly is preparing to publish selected prices that Medicare pays for common medical procedures.

Both initiatives are part of a movement to provide consumers with information they need as they take on more responsibility for medical costs that were once paid largely by employers and insurance companies.

Advocates of so-called consumer-driven health plans say giving patients more power to choose doctors and hospitals will slow the rise of healthcare costs. These plans typically combine high-deductible insurance policies with tax-sheltered savings accounts meant to help families handle the extra expense.

Easy access to pricing information is key to driving down costs, proponents of the idea say. Couple that with quality reports about hospitals and doctors, and consumers can make cost-efficient decisions, the argument goes.

But the complexity of medical procedures and the inconsistent ways that hospitals and doctors calculate their rates make pricing and quality information of little use to consumers, some experts warn.

“It is not like buying a car,” said William Custer, director of the Center for Health Services Research at Georgia State University in Atlanta.

The price of treating a heart attack, for example, will depend on many factors, including a patient’s overall health, age and what rates the hospital has negotiated with the insurance carrier.

But even critics agree that some information is better than none.

For $7.95, Health Grades will provide consumers through its website a breakdown of average prices for certain procedures in each of several regions of the country. Gastric bypass surgery, for example, would cost a patient without insurance $34,379 on average in California and 12 other Western states. A patient with a health plan requiring a 20% co-pay would pay far less: $3,728.

The figures, provided by more than 80 health plans around the country, do not compare doctors or hospitals. Although the service doesn’t enable consumers to shop around in advance, it does help them recognize when a quoted price is out of line.

Scott Shapiro, a spokesman for the company, said the reports -- which the company said were the first sold directly to consumers -- were not meant as exact pricing guidelines, but “this gives you a benchmark to have discussions about the prices.”

In recent years, companies such as Chicago-based Subimo and WebMD.com, operated by Emdeon Corp. of Elmwood Park, N.J., have begun to offer pricing and quality reports through large employers and insurance companies. Insurance giant Aetna Inc., which covers nearly 15 million people nationwide, last summer began providing the price of about 600 medical procedures to its members as part of a pilot program in Cincinnati.

And the federal Medicare program will start publishing the prices it has negotiated for common medical procedures in six communities, the Washington Post reported last week. The government also reportedly plans to require hospitals to release mortality rates for common illnesses such as heart attacks and infections next year in a bid to allow senior citizens to compare hospitals.

Such reports are unlikely to spur consumers to haggle over the price of an angioplasty any day soon, the experts say, but the growth of such services point to a shift in the industry.

“All indications are this is the way the market is moving,” said John Goodman, president of the National Center for Policy Analysis in Dallas.

Consumer advocates, however, worry about the consequences. “How are we expecting individuals with limited purchasing power to force prices down when large insurance companies and government with higher purchasing power haven’t been able to?” asked Anthony Wright, executive director for Health Access California.