Auditor: Price transparency still lacking in Vermont health care - VTDigger
 

Auditor: Price transparency still lacking in Vermont health care

The Vermont State Auditor’s office says the state has more work to do to make sure consumers know how much their health care services cost before they purchase them.
Doug Hoffer

Doug Hoffer. Photo by Roger Crowley/VTDigger

In a non-audit report Doug Hoffer’s staff released Monday, the office said that consumers often cannot find out the cost of health services, especially if they’re not proficient with technology.

The report is a followup to Hoffer’s efforts in 2014 to increase price transparency in the health care field, which he said was increasingly important because both insured and uninsured Vermonters can face high out-of-pocket costs.

Across the nation’s health care industry, hospitals and doctor’s offices do not publish price lists for their consumers to peruse before they choose to get treatment. Instead, consumers receive their service first, and the doctor or hospital then bills the insurance company for every service the person received.

Once they get the bill, the insurance company will attempt to lower what the hospital charged them, either by enforcing a contract they have already negotiated that says how much the company has to pay the doctor or hospital, or by negotiating a new deal through a back-and-forth process.

The insurance company that has negotiated the best deal with the health care provider will pay the least amount for that service, meaning that the bigger insurance companies will often pay less than the smaller ones, and there is no market price for a health care service.

In contrast, the government-funded Medicaid and Medicare programs pay fixed prices for services and do not have to negotiate down prices. People without insurance have virtually no bargaining power to negotiate the price of a service, and must rely on charity care policies that the hospital sets rules for internally.

In a report from 2014, Hoffer’s office wrote that a years-old database called VHCURES — which the Green Mountain Care Board uses to perform analysis that leads to regulation — was set up in part to provide consumers with health care pricing information that they can use to shop for the right health care provider, and that use had not come to fruition.

The 2014 report quoted the Green Mountain Care Board saying it would “explore the feasibility” of using VHCURES to provide price transparency to consumers, but the auditor’s office said “providing consumers with price and quality information has not been a priority” for the board.

In response to Hoffer’s report and advocacy, the Legislature passed language in Act 54 of 2015 requiring the board to study whether it could use the VHCURES to set up a consumer website with pricing information. The board and the Legislature did not move forward with a consumer pricing website.

Act 54 also required Blue Cross Blue Shield of Vermont and MVP HealthCare to create databases where their customers could search the costs of procedures under their plans. Hoffer’s team reported Monday that it was only able to use Blue Cross’ website, and while the insurer is making progress, the information found there was incomplete.

“Our analysis finds that the approximately 30,000 uninsured Vermont residents must rely on publicly available information that does not provide health care price information specific to them and their families, or must turn to third-party providers … that provide similarly incomplete price and quality information,” the report said.

“Price information for (colonoscopies, mammograms and radiology) were each available for 60 percent of sampled facilities,” the report said. “Price information was available for 40 percent of physicians providing services related to diabetes, 80 percent of physicians providing services related to mental health, and 60 percent of physicians providing services related to osteoarthritis.”

However, the report said it was difficult to pair the data on prices to data on the quality of the services at a facility. Using separate random samples of providers, the auditor’s office found quality information for 0 percent of providers performing mental health services but 90 percent of providers performing diabetes services.

“On the quality side, we definitely need more and better data,” Hoffer said. “Optimally, you marry price and quality information because without the quality information, some people, they figure if it’s more expensive it must be better.”

Hoffer said that health care pricing is “the weirdest system in the world” and the quality of the services a person receives is not necessarily higher just because the price of the service is higher.

He said consumers deserve to have all the information, and as a society, “we’re all just spending too much money (on health care) not to have this information for everyone.”

Erin Mansfield

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  • Randy Jorgensen

    Kudos to Doug and his team.

    ” Instead, consumers receive their service first, and the doctor or hospital then bills the insurance company for every service the person received.”

    What would you do if you sat down at a restaurant and was given the menu with no prices next to the offered meals? You have no idea if that burger is $8.99 or $89.99 until AFTER you’ve eaten it.

    Shame on the medical industry for allowing this to happen.

    • Walter Carpenter

      “Shame on the medical industry for allowing this to happen.”

      I second this and thank Doug for doing this audit, Erin for reporting it, and the digs for printing it.

      • Mary Alice Bisbee

        On the other hand, as a Medicare recipient with a coinsurance that not only pays the deductibles and 20% that Medicare does not pay, I know exactly how much is paid for every service, retroactively. Usually, it is less than about a third of what is charged!
        I have no problem receiving care as long as Medicare covers it. The only thing I cannot get covered is having my toe nails cut, because although I have peripheral neuropathy I am not diabetic. If I had diabetes I could have my toe nails cut for free! Go figure!
        So why don’t we have Medicare for All like other countries do??

  • Scott Woodward
    • Dear Mr. Woodward:

      Excellent commentary as always. In my past experience, CMS/Medicare overpays for facility fees often especially in the outpatient setting. The government, as a matter of practice, remits more than the gross charge regularly, and the providers are allowed to pocket the (over)payment. I encountered this while uncovering healthcare fraud. Fraud, waste & abuse is alive & well.

  • Thank you Erin for attempting to address this issue. It is virtually impossible to make cost comparisons on the BCBSVT website, despite legislation encouraging this. If the general public knew the cost differences between independent and employed practices, as you have so well illustrated over the past year, there would be a great opportunity for the public to save money and not compromise quality. Keep it up, Erin!

  • Craig Miller

    While a centralized database is certainly a nice idea a significant 1st step is to require each healthcare provider to publish their list of charges for the medical procedures they provide. This information is already in their IT system. Any IT professional worth their salt should be able to crank this out in a presentable easy to understand format in day.

    • Scott Woodward

      Craig,

      Being an IT professional is one of the hats I wear and I can speak to your comment directly. I don’t completely disagree with you – the information is out there, but it’s not in the format that an IT professional could in turn serve it up to consumers through a web application or mobile app.

      The Department of Health publishes facility costs on its website in PDF format, so the data is there, but it would be very time-consuming to extract and put into a database. Not really a repeatable process (but maybe the Dept. of Health would provide the data in Excel format as a public information request). The other drawback to the Dept. of Health data is that the info does not include what the insurers charge, so it would be a challenge, if not impossible, to cross-walk this data to insurance charges.

      http://healthvermont.gov/hc/hospitalreportcard/finance_pricing.aspx

      • LOL – maybe UVMMC should drop its crappy Chargemaster and just use Amazon’s web service; the pricing, comparison, AND past records are accessible, fluent, and available for the duration of one’s account! – meanwhile, a 15-minute MRI to diagnose a working man’s shoulder pain is billed at $3000; the patient’s ‘deductible’ cost was $2000, on top of $900/month premiums (including employer contribution). And meanwhile, how much is the Brumsted compensation package? Fortunately we have a name for this regard for patients: trumpery!

    • Craig Miller

      For further clarification at every medical billing system contains an relational database of ICD 9 or 10 codes and various costs associated with them. (These are what is submitted to the insurance companies for billing purposes, you the average consumer are not readily privy to these) I say various costs, as depending on the patients insurance company the “Billed” rate that is submitted will be in tune to be more than what the insurance Company provides, plus your deductible if you have it.

      This is why health care providers keep their billing costs secret because even within a single provider, billed costs vary widely between insurers, govt. providers and even self payers.

      Presenting this in a tablular HTML format is not rocket science, and I am sure there are many high school tech dept’s that would jump at the chance to come up with a simple web site that would take standardized data dumps from all state providers and make it usable.

  • Please show me where I can find the “price list” for any/all medical practice(s) in Vermont, I have looked for it(them).

  • Jamie Carter

    And herein lies one of the major ways to reduce medical costs…

    All insurance companies should have a readily available database of the costs for a given procedure at all medical facilities, AND give premium discounts for those people who comparison shop.

    It really isn’t that difficult, except medical facilities really do not want to unveil how much they are really charging.

    The second step is for the GMCB to step and ensure that the public is being charged a reasonable cost for a procedure that somewhat remotely reflects the actual cost to perform the procedure.

    • John McClaughry

      Thirteen years ago EAI surveyed the 14 hospitals, asking what they would charge a walk-in cash customer for a blood sample drawing and TSH (thyroid) and lipid panel analysis – very common, standard procedures. Only two (NVRH and NWRH) even replied. We tried again, and bagged five more. Finally Fletcher Allen had their chief Montpelier lobbyist call me and inquire “what are you gonna do with this information?”
      The quoted prices ranged from $90 to $234. My conclusion: “since most charges are paid by a third party, most patients have little reason to care… Hospitals may not be very much interested in having patients find out what they charge.”

  • Cindy Snow

    All the information you need is available here.

    http://healthvermont.gov/hc/hospitalreportcard/finance_pricing.aspx

    • Doug Hoffer

      This information is not what most people need. It is “charge data.” It represents the full cost of a service or procedure, but that is not what hospitals charge those with insurance. Prices for the insured are negotiated with providers by the insurance companies and they may vary considerably by provider (see below). Moreover, charge data does not address the critical question of what the patient will be expected to pay after considering deductibles and co-pays. The charge data is really only of use to those without insurance. Nevertheless, the charge data does allow a rough comparison of costs for common procedures. That is, not what a patient would actually pay, but the difference between one provider and another. As we pointed out in the report, the total estimated cost for an appendectomy can be as much as $24,000 or as “little” as $16,000. That’s a huge difference for whomever is paying.

      • Neil Johnson

        Kudos to you for bringing this up. There are so many different price, we get to see none of them and it’s not by mistake its by design. The design in no way benefits the public. But so many have been duped into thinking anything is for free. It all part of the health care Ponzi scheme monopoly.

  • Cindy Snow

    I have posted the VT Department of Health website where the information is located multiple times but the moderator keeps removing it. Just search Vermont Hospital Charges in Google and it will bring you to the site that easily compares pricing for common procedures among hospitals.

  • Darcy Canu

    As a consumer in the VHC/BCBSVT system, I find it hard to believe that the GMCB would NOT make it a priority to help their subscribers uncover the best rate possible within their coverage area in general for necessary services. Instead, I read ‘“providing consumers with price and quality information has not been a priority” for the board. This kind of disclosure makes me think that the GMCB must believe that we’ve all just dropped off the turnip truck and don’t CARE what it’s going to cost, we will just blindly go forth into the morass that is this state’s pit of a health care system and trust the provider to be honest and bill fairly. Those days are LONG gone, if they ever existed at all. We deserve a resource that we can access that gives us, in plain English, who/what/where/how much!

    • Dave Bellini

      Darcy, it’s my understanding that the GMCB opposes price transparency. That’s why it’s not a priority. Prices for common procedures should be posted in plain sight. All prices should be posted clearly on a website. It’s the legislature that needs to get behind the idea. And they’re not.

  • Neil Johnson

    They are buying old hotels! But it’s all in a state where EB5 scandal of $200 million will go down with no accountability. And how could we forget our medical website, a complete failure, again with no accountability. White collar criminals Vermont is open for business we will not prosecute. Co mingle funds all you want. Grant money is free for the taking!

  • Neil Johnson

    Take the 10 most popular operations make it mandatory that the price is posted. Same for drugs.

    “Hoffer said that health care pricing is “the weirdest system in the world” and the quality of the services a person receives is not necessarily higher just because the price of the service is higher”

    ONLY MONOPOLIES can get away with this. There is no other business in the world where people don’t know the price before they buy. All the insurance companies know the prices. Vermont needs more white collar criminals to make out healthcare monopoly complete.

  • John McClaughry

    It’s interesting – and gratifying – that Auditor Hoffer, a long time Prog, is interested in improving price transparency for patients purchasing health care. The Left is usually only interested in having the government deliver “free” health care where everyone can enjoy “appropriate care at the appropriate time in the appropriate setting”, and no patient has to consider costs, since health care is a “public good” (which it’s not). Price transparency is a key ingredient of “consumer driven health care”, which has, alas, never even been discussed by our single minded, single payer legislators.

    • Martha Stretton

      I hope everyone reads and digests Mr. McClaughry’s comment, and that Governor-Elect Scott will slow down the all-payer train and work toward a solution that trusts patients to make rational choices in collaboration with their doctors.

    • I do not understand how anyone can be so arrogant to think that the USA is right and the rest of the developed world is wrong about health care for all.

    • I’m a liberal and I have always preferred to know what something costs before I buy it, same for all the liberals I know.

  • Mary Evslin

    I am a huge fan of the care given at UVM Medical Center and of their research but…the use of “surplus” funds to fund community activities like low-income housing makes transparency and accountability even more difficult to achieve. If hospitals can fund anything which might affect the health of the population, we will never know the cost of medical care itself. Will or should our bills have line items for public housing and needle exchanges?

    The health of Vermonters may well improve with clean needle programs, exercise equipment in parks, and low income housing purchased. But if these are purchased by hospitals, how will we ever be able to know the cost of medical procedures and make informed choices. Housing, recreational and health non profits or government entities should pay for services ancillary to what we consider traditional health care….not hospitals. Surpluses, which can occur, are still overcharges which should be used directly to reduce future bills.

  • rosemarie jackowski

    In Thailand they give the patient a list of prices up front. The quality of care is better and the prices are much lower there.

    CNN did an hour long documentary on medical tourism.

    https://skift.com/2015/01/30/cnn-documentary-shows-medical-tourism-in-thailand-is-a-serious-business/

  • Jason Brisson

    First issue–$14,498 a year for heath insurance split between me and my employer. I still pay co pays when I go in. I still get bills after I go in for what the hospital charged, but what insurance didn’t cover. So I pay three times, for a “gold” or “cadillac” plan, so good it was what Obama wanted to tax–but its not insurance, its a buyers club to get reduced rates, and we need to call it what it is. Second issue–Fletcher Allen. My wife had the same procedure done three times. $800 the first, $500 the second, like $250 the last. Which is it? Took the same equipment, same amount of time, same amount of nurses/technicians. Medical billing in the state of Vermont is a sick joke.

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