Hospital Pricing

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      Hospital Pricing

      A groundbreaking new rule you might not have heard about could save you thousands of dollars. For the first time, America's hospitals are required to give upfront pricing on medical procedures so you can shop around. It's the result of a June 2019 Executive Order from President Trump. It took effect January first after surviving legal challenges from U.S. hospitals. Cynthia Fisher of patientrightsadvocate.org helped push the big change that has bipartisan support.

      Cynthia Fisher: It was very difficult because hospitals and insurance companies and the many middle players had kept patients blind to know prices. And then we were blindsided by outrageous medical bills and, oftentimes, price gouged, and then expected to pay with a blank check whatever the hospitals chose to charge us. And now that is game over for being kept in the dark.

      Sharyl: Do you know how this works in practice? So as of now, if somebody needs a medical procedure done at a hospital, do they call and ask, do they go online?

      Cynthia Fisher: Yes. So, the rules, and by law, the hospitals are to post their prices, the discounted cash prices and the negotiated rates for our care, online, easily accessible for any consumer. And we have the right to know these discounted cash prices, which in general, are nearly 40% lower oftentimes than the negotiated rate

      Sharyl: For the insurance companies?

      Cynthia Fisher (06:15): For the insurance companies. And knowing these charges will drive down the cost of care and coverage because it invokes competition and the consumer being aware of competition.

      Sharyl: Can prices vary dramatically from one hospital to the next for the same procedure?

      Cynthia Fisher: Absolutely. In fact, what also prompted this whole change was innovative surgical centers like OSS Surgical in York, Pennsylvania. I'll give you a great example. They post their prices online. And employers, like Stauffers Grocery, in Lancaster, Pennsylvania had incentivized their employees by steering them to centers such as OSS where a knee replacement, one of their employees shared with us that her knee replacement was $15,000 posted online. Their employer gave her a $2,000 bonus for getting that knee replacement there rather than in the opaque hospital system where, coincidentally, her husband had a knee replacement the same year. And his, at the opaque hospital system that didn't show its price, was $75,000. So, look at the difference, a $15,000 knee replacement versus a $75,000 knee replacement. And knowing that upfront, that employee, that worker saved her own funds as well as for her company and fellow employees.

      And a woman in Georgia actually shopped online with one of the price transparent surgical centers at Oklahoma Surgical and saw that the procedure that she was quoted in her Atlanta, Georgia hospital for an estimate of around $40,000 could be an actual price at Oklahoma Surgical for 3,600. Rather than flying to Oklahoma for that surgery, she actually negotiated with her hospital and they matched the price, and she ended up getting it for 3,600.

      Cynthia Fisher: So, this huge win of healthcare price transparency, knowing the real prices, accurate prices, before we get care will be something that is there for what 90% of Americans surveyed have wanted all along. To know prices from both hospitals and insurers so that they can save to reduce their costs of their care and coverage.

      Sharyl (on camera): There’s more. Soon, insurance companies will have to disclose the secretive rates they’ve negotiated with doctors and hospitals. Insurers have fought that rule saying it will cost millions to provide the data.