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Health Works Collective > Business > Finance > Price Transparency in Healthcare Still Lacking
BusinessFinanceHealth ReformHospital AdministrationPolicy & Law

Price Transparency in Healthcare Still Lacking

Bill Crounse
Bill Crounse
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The following story is absolutely true. Only the names of the people involved and the name of the academic medical center have  been changed to protect the not-so-innocent.

The following story is absolutely true. Only the names of the people involved and the name of the academic medical center have  been changed to protect the not-so-innocent.

Over the years, I’ve written a number posts about the maddening and frustrating absence of transparency in healthcare pricing. What else do you ever buy without having any idea of what it is going to cost you? Would you order a meal in a restaurant without knowing the price? Would you sign on the dotted line to buy a new refrigerator not knowing if it was going to cost you $500 or $5000? No, I don’t think so. So why in the world do we continue to put up with a healthcare system that all-too-frequently is incapable of telling us ahead of time what anything is going to cost?

This is a story about Sally and Bob. A few weeks ago, Sally traveled to Big U health system for a dermatology appointment. Sally was referred there due to an on-going medical condition that was puzzling to her local dermatologist. Sally’s husband, Bob, is a primary care physician who knows a thing or two about medical billing. Bob’s employer provides health insurance that has large deductibles and co-pays, so Bob knew that he was going to be the line for whatever charges Sally would incur from her visit to see the specialist at Big U. Bob also knew that academic medical centers often charge something called a “facility fee” that is in addition to any charges associated with the doctor’s fee, lab work and any procedures that might be done.

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Driving to Big U health system in heavy traffic and finding parking there is always a hassle, so Bob decided to take time off work and drive his wife to her appointment. Upon arriving at the clinic,Bob and Sally entered the reception area and Bob took a seat within earshot of the front desk. Sally approached the receptionist and announced her arrival. She was asked the standard questions about which doctor she was scheduled to see that day and, of course, to verify her health insurance. Since Bob had clued in Sally ahead of time about the likelihood of a “facility fee”, Sally decided to ask the receptionist if she would indeed incur such a fee and, if so, how much it would be. That’s when things got interesting.

Sally:  “My husband told me that academic medical centers often charge a facility fee in addition to other usual charges. Is that correct?”

Receptionist:   “Yes, that is correct.”

Sally:  “Then, could you please tell me how much the facility fee is going to be? You see, our insurance plan has high co-pays and deductibles. We expect that we’ll be paying100 percent out-of-pocket for my visit today. So how much is the facility fee?”

Receptionist:  “Well, it depends.”

Sally : “Depends on what?”

Receptionist:  “On what kind of insurance you have and other things.”

Sally: “Well then, can you a least give me an idea of how much the facility fee might be?”

Receptionist: “I’m sorry, ma’am, I don’t have that information.”

Sally:  “Well then, who can tell me what I’ll be charged today for the facility fee?”

Receptionist: “I’m sorry, but there isn’t anybody here who has that information.”

Sally:  “But somebody must know. Who would have that information?”

About now, Bob, who could overhear this entire conversation from where he was sitting, felt like his head was going to explode.

Receptionist:  “There are only two people who could help you with that and they aren’t available right now. If you want to know, you’ll need to call and make an appointment with one of them.”

Sally:  “But I’ve already waited weeks for this appointment with Dr. Derm. You mean to say you can’t even give me a rough idea of how much I’ll be charged for a facility fee?”

Receptionist: “No ma’am. For that information you’ll need to make an appointment with the billing department.”

price transparencyEven though Sally’s head was also about to explode at this point, she took a seat next to Bob and waited for her name to be called. Fortunately, she only had to wait about 20 minutes past her appointment time before she got in to see the doctor. It’s a good thing she wasn’t there for a blood pressure check.

About 3 weeks after Sally’s appointment with Dr. Derm she received an explanation of benefits from her insurance plan. And just as Bob had predicted, there was a “facility fee” on the bill. It was $225.

Bob and Sally can afford the extra $225. But what if that facility fee meant not being able to pay this month’s rent, or having to cut back on food for the family? Of course, maybe that’s what the receptionist was trying to tell Sally when she responded “It depends” to Sally’s question about the fee. Perhaps it depends on doing a “wallet biopsy” at the time of billing. Perhaps the fee would have been much less or even waived if Bob and Sally had flunked the wallet biopsy. They’ll never know.

The moral to this story is that despite “health insurance reform” and the supposed rise of “consumerism” in healthcare, the system is still far from transparent or market-driven when it comes to the price of almost anything. Why we as consumers continue to tolerate this is a mystery, especially when more and more of us are on the line with high co-pays and deductibles often amounting to thousands of dollars a year. Somehow healthcare price and cost transparency seems to have escaped reform.

What do you think? Has this happened to you?

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