New Transparency Law Spotlights Wide Variation in Hospital Costs

Could you imagine walking into the grocery store or an electronics store and not knowing how much things cost until you had committed to buy them?  Gotcha!  That's the way the American health care industry has worked for decades, and that policy takes much of the blame for the rising cost of health care, News Radio 1200 WOAI reports.

But a new law that took effect January first aims to bring some transparency to the opaque practice of health care pricing.  It requires hospitals to post the costs of its services on line.Katherine Bisek, Vice President for Strategic Initiatives for United HealthCare in Texas, says the differences are as amazing as paying $30 for a loaf of bread that you can buy across the street for $2.

"In San Antonio, for example, a knee MRI can vary  from betwen $250, to $1630," she said.  "While back surgery ranges from $9,320, to $63,460."

She points out that these are the prices hospitals charge cash-paying patients, and most hospitals have negotiated prices with major health insurance providers, but she says this gives patients a good idea of how much they could save by going elsewhere, especially with patients paying more and more of the costs of health care.

Bisek says United HealthCare and other health insurers are making the information available to customers on how they can access and use this information.

"If our members use our resources, they pay 36% less than non users," she said.  "And this is very important for the 43% of Americans who are now enrolled in consumer direct health plans that feature high deductibles."

She says safety and efficiency ratings are also posted, along with pricing.With many Americans now using the Internet to compare prices on other purchases, Bisek hopes that this new pricing transparency leads to cost reductions for basic health care services.  

She points out that, unlike the grocery or the electronics store, patients may be limited by 'in network' status, as well as whether the physician they are relying on for the procedure has privileges at the cheapest hospital.

"As people udnerstand the price variation, they use the tools more often, and that often results in less cost."

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