Posted by Bill Sandweg on 29 March 2021.
After years of fighting the proposal, hospitals in the United States were finally required to disclose their prices for the various services they provide. The battle was long, hard and expensive. Unsurprisingly, many hospitals and hospital chains are still in full resistance mode.
The disclosure rule, which took effect on January 1, requires hospitals to disclose, not only their “sticker” price for various procedures and services, but also the discounts they give to insurance companies or health plans as well as what they charge uninsured patients. The data are to be displayed prominently on a public web site. The data is to be easily accessible and without barriers.
For years, hospitals have treated the discounts they give to health insurers as trade secrets. They correctly realize that disclosure of these discounts will reduce their bargaining power the next time they sit down with an insurance company to negotiate rates. This is exactly why the federal government now requires that these discounts be disclosed along with the “sticker” prices. A free market cannot operate if prices are hidden. There can be no competition under those circumstances.
The Wall Street Journal consistently does an excellent job reporting on the medical industry. Its reporters had a good story last week on the steps many hospitals and hospital chains were taking to avoid having their prices out where the public could find them. The Journal found that these hospitals were listing their prices all right but were coding their web sites so that the results were not discoverable on the kind of Google or other search the average person would do. To get to the prices, you typically had to click through multiple screens. At the very least, these actions appeared to run contrary to the spirit of the required “easy” accessibility and absence of barriers.
When questioned by the Journal, some hospitals claimed a mistake in coding and removed the code which made the pages undiscoverable. Other hospitals claimed that they were not trying to hide anything but felt that the public needed to see other information before seeing the prices in order to give the prices “context.” Still others appear to be waiting to see how serious the federal government is about enforcing these requirements before making their prices easy to find.
None of this should be a surprise to anyone who watches the medical industry. For at least the last ten years, hospital chains have been getting larger and accruing greater bargaining power. In addition to buying other hospitals or building more of their own, many chains have been purchasing the medical practices of the doctors who send their patients to the hospitals to be treated. This has the effect of locking in the flow of patients to the hospital.
The statistics are clear that the more hospital consolidation that exists in a city or region, the greater the rise in prices for the services these hospitals offer. The hospital industry claims that these consolidations produce cost savings. That claim may very well be true, but, if it is, the savings are going directly to the bottom line of the hospitals; they are not being seen or enjoyed by the public.