by Ateev Mehrotra MD
As a doctor, I’m the perfect person to price shop for an operation. But the process went terribly.
After three months of using hot compresses to shrink the stye on my daughter’s eyelid, it wasn’t getting any smaller. My daughter is prone to this sort of growth, called a chalazion. This one would have to be removed surgically, like the one she had removed from the same eyelid two years earlier.
But there was one key difference this time around: Like tens of millions of people who get health insurance through their employer, my family was now in a high-deductible health plan. That meant we would have to pay for the entire cost of the surgery out of pocket. Suddenly, the cost of the surgery became very important to our family.
Encouraging patients to price shop for their health care is one reason employers are switching to high-deductible plans. The theory is that patients will compare prices across different doctors or hospitals and choose the lower-priced one, thereby saving themselves (and their employer) money. But in order to shop, you need to be able to see what something costs beforehand. Transparency in health care prices is a goal of President Trump’s health agenda, and is a priority for other politicians as well.
My family had every advantage that newly minted price shoppers could possibly have: We live in Massachusetts, one of the states that have passed price transparency laws to help patients shop for care; I am a physician; my research focuses on consumerism and price transparency, giving me plenty of insider information; and the surgery was minor and not urgent, giving us lots of time to shop around.
How did it go? Terribly. Here’s why:
On the website for our health plan, we muddled our way to its hard-to-find price transparency page. When we finally got there, we didn’t get the information we needed: removing a chalazion is not a common procedure, so it wasn’t listed.
An ophthalmologist would remove the growth. The billing department for the ophthalmologist who evaluated my daughter could tell us only what the doctor’s fee for the surgery would be ($1,007) and didn’t know the fees for the anesthesiologist or the operating room, both of which could be as much as, or more than, the doctor’s fee.
To get a better price estimate, we called our health plan. It asked us to submit a written cost request for the surgeon and the hospital we were considering. Twenty-four days later, we received an estimate of $452, which was both incomplete (it only showed the ophthalmologist’s fee) and incorrect (the health plan mistakenly assumed we were in a different insurance plan).
Other ophthalmologists we called said they would give us a price quote for the surgery only if we brought our daughter in to be evaluated. Each evaluation visit would cost more than $200.
One month into our price-shopping effort, all we knew was that the ophthalmologist’s fee would be in the $452 to $1,007 range, and the total surgery would cost much more. All the while, the red, swollen eyelid on our increasingly miserable middle-schooler was waiting to be treated. So, we decided to go ahead and have the original ophthalmologist do the surgery, even though we had no idea what it would really cost.
In the end, it cost us $1,443, including $556 for the ophthalmologist and $887 for the anesthesiologist and hospital. Despite the challenges, we recognize that we were fortunate — our daughter’s surgery went well and we could afford this unbudgeted expense. Others aren’t so fortunate.
Sadly, my family’s price-shopping experience is the norm in the U.S. My colleagues and I have found that most people can’t successfully shop for care, and that offering people a price transparency website doesn’t help them switch to lower-cost providers and doesn’t decrease health care spending.
Why isn’t price transparency currently working? It’s not that Americans don’t agree with the idea of shopping for health care. Most believe it makes sense and could save money for families and the health care system. Many recognize that there’s a great deal of price variation and believe that health care prices have little relation to quality, a suspicion our research backs up.
What can be done? First, we need to bundle payments to hospitals and surgery centers: a single payment that covers everything related to a procedure or doctor visit. Patients shouldn’t have to navigate the craziness of different bills for the hospital, surgeon, operating room, pathologist, anesthesiologist, and the like.