Local health care economist and others react to a new rule for hospitals

Critics say it could cause confusion
Updated: Jan. 1, 2019 at 6:51 PM CST
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NEW ORLEANS (WVUE) - The arrival of 2019 triggered a new federal rule that requires hospitals to post prices for medical services online, and while some people applaud the move, others say consumers will not benefit as much as some thought.

"I think they should let people know how much it’s going to cost,” said Richard Langley as he walked outside of a local hospital on New Year’s Day.

Some members of Congress pushed for more transparency related to medical costs.

"So, what we’ve done is go back and come up with a lot of different ideas like price transparency, [so] someone knows the cost of a test or procedure before they get it done, as opposed to getting a bill six weeks later,” said Republican Sen. Bill Cassidy.

But some people who monitor health care costs as part of their profession said the new rule is flawed.

"You know, I think the theory is that more transparency is going to help, but this is actually not a great kind of transparency,” said Jeanne Pinder, founder and CEO of Clear Health Costs.

"This law is trying to do something which I think desperately needs to be done which is provide price transparency, but they’re doing it the wrong way,” said Walter Lane, Ph.D., a health care economist at the University of New Orleans.

Lane said what hospitals are mandated to publish online is not giving the public accurate information.

"What the law requires is hospitals to publish what we call the 'charge master' which is kind of like an MSRP for cars. It's a list price, but nobody charges those prices, so this is going to provide no useful information to anybody,” said Lane.

Pinder is all for people knowing beforehand the medical expenses they will likely face, but she doesn’t like the information hospitals have begun posting.

"It’s an artificially inflated price that nobody really pays,” Pinder stated.

Lane, who sits on the Board of Commissioners for Slidell Memorial Hospital, agrees that most patients do not pay hospitals’ charge master price.

"So, I’m really upset because they’ve done something that looks like price transparency which is actually worthless, or maybe worse than worthless. It’ll be very misleading,” said Lane.

Pinder said the public may not be well-served.

"So, you might actually be confusing people by telling them this really, really high price and causing them to think that that’s what it costs when it really doesn’t,” said Pinder.

And there are concerns that hospitals’ reputations could be tarnished.

"It might make some hospitals look like they charge more than they actually do…I think this is going to be just very confusing to the public and not at all helpful,” Lane stated.

Pinder thinks the federal government should tweak the new rule.

"The Medicare paid-rate is often about a tenth of what the charge master rate is, so we would think that putting those two next to each other would be useful, and then we suggest adding the cash price, or the price that the hospital will accept as a cash payment from an uninsured patient, or somebody who just wants to pay cash. That would be informative,” Pinder said.

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