Q&A: Online health care prices often 'wildly different' from estimates offered over phone
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Key takeaways:
- In many hospitals, there are significant variations between online prices and prices quoted over the phone.
- Providers are in a position to help patients find the lowest cost services, a researcher said.
Price transparency is considered a step in the right direction when it comes to taming health care costs, but researchers have found that prices for certain hospital services can differ — often wildly — from what is presented.
Although hospitals in the U.S. are required to make the prices of their services publicly available per CMS’ Hospital Price Transparency Rule, it was not yet known if the prices posted online correlate with prices given to a patient over the phone, Peter Cram, MD, MBA, chair of the department of internal medicine at the University of Texas Medical Branch, and colleagues wrote.
To learn more, the researchers sampled 60 U.S. hospitals in 2022 and collected their online cash prices for two CMS-required shoppable services — vaginal childbirth and brain MRI. Then, “secret shopper” callers asked for each hospital’s lowest cash price for those services over the phone, and the researchers compared the prices. They published their results in JAMA Internal Medicine.
Healio spoke with Cram to learn more about the study and what primary care physicians should know about its findings.
Healio: Why did you decide to research this subject? Why is it important?
Cram: I've personally been studying health care prices for more than 15 years, including prior studies where we've used secret shopper methodology to investigate the prices that hospitals give when patients call. In January of 2021, CMS implemented this new sweeping national rule that required all U.S. hospitals to publicly post their own prices on their own websites, which was sort of presented to be a game-changer in terms of price availability and transparency and making sure that patients knew the prices they would pay when they went to the hospital.
In sort of a curious turn of events, I had an email exchange with Mark Cuban (also a co-author of the study) about price transparency. And he said to me, to paraphrase, ‘I don't believe it. The prices they post on their website won't be the prices that you get when you call them.’ A light bulb went off in my mind, and I said, ‘Well, let's check on that.’ So, we proceeded to call 60 U.S. hospitals to see whether the prices on their websites that the hospitals posted matched the prices that they gave when we called them for two diagnoses: brain MRI and vaginal childbirth.
Healio: Why did you choose brain MRI and childbirth?
Cram: One reason is because both brain MRI and vaginal childbirth were listed as two of the hospital services that Medicare required them to post on their website. Hospitals were required to post prices for these two therapies or procedures. The second reason is that both of them are common. So, these might actually be real reasons why patients would call in to a hospital to check a price. And third is that both of them tend to be planned. A brain MRI is something that you might think, “Oh, I have a headache. I need an MRI. Let me think about the price.” And similarly, when people are having a baby, they often know in advance, so they might actually be able to, say, “shop around.”
Healio: Will you briefly describe your findings and their importance?
Cram: There were really three main findings as I think about them.
The first is that, for both MRI and childbirth, the online price and the phone price often were wildly different. An example might be a hospital with an online price for a brain MRI of $2,000, but then when we call, they would say it was $5,000. Or their online price for childbirth might be $20,000, but when someone called, they would say, “Oh, it's only $10,000.” To compare, people buy cars all the time. This would be the equivalent of going to one dealer and they say that the Honda Civic is $30,000, and then another dealer right down the street says it's $65,000, and you think “Well, I would never pay $65,000 for a Honda Civic that was 30.” But this is what we were finding.
The second thing we found is that sometimes the hospitals had online prices on their website, but when we called, they wouldn't actually be able to give us a price estimate. In other words, they seem unaware that they had their own prices up on their website, which was somewhat surprising.
The third thing that we found is that, for 10% of hospitals, they didn't have the MRI price posted, and for 47%, the childbirth price wasn’t posted, and that's in violation of the Medicare statute. And similarly, sometimes the prices were just erroneous. One example would be an online price for a brain MRI listed as $166,000 or an online childbirth price listed as $0. And both of those seem like prices which just can't be right, don't seem to fit with the spirit of the Medicare rule.
Healio: With these prices being drastically different, which one was closer to the truth — the cost heard over the phone or what was posted online?
Cram: Truth is a difficult thing to ascertain in health care pricing, and that's one of the things that makes the public so crazy. Prices in health care are often extremely difficult for patients to obtain. They depend on your health insurance. They depend on where you're going for care. They depend on the exact care that you require. But what I would mostly point out as a takeaway from our study is that, if you believe our results, it seems that there often are lower priced hospitals in the city, in the neighborhood, in the market where people live. And so, it probably pays to ask around because there's probably some place that's going to give you the service that you want and be of reasonable quality and do it well. And I think our results just point to the fact that prices are widely variable.
Healio: What is the take-home message for primary care physicians?
Cram: I think that the idea is that if you're really trying to serve your patients, you should be having conversations with your patients about how they're going to pay for the care that you are recommending. And you should know the lowest price hospital or imaging center in your community because there's a wide difference, and there's a chance to help your patients save some money.