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Transparency – It’s Not Just for Ghosts

By: Kelly Dempsey, Esq.

If you’re paying any attention to the news these days, you know that the healthcare industry as a whole has been facing some pretty large issues.  In addition to “repeal and replace,” we’re also faced with the skyrocketing cost of healthcare in the United States.  Both topics are focused on money – either loss of money by insurers who are now threatening to leave the Marketplace or the high costs of new drugs that have hit the market, that have the potential to cripple employer health plans.  While both of these are clearly issues that need attention, let’s look at something other than the turmoil in the Marketplace or shiny new things that are also fueling the fire.  

What about the costs of standard medical procedures?  When your doctor says you need a medical procedure and you actually think to ask “how much will this cost,” do you get a straight answer?  In some cases, you might. Maybe you’ll get a ballpark figure. But most of the time, the response will be wishy-washy because the procedure is unique to you and the providers cannot foresee complications that may change the projected cost.  

You may be thinking, “Ya, ya, ya.  I’ve heard this speech about price transparency before.”  In the past I had the same thought, but then I experienced the radical difference in charges for the same service and my view has been forever shifted.  I received the same procedure two years apart, at two different facilities, in two different states.  It’s been quite a while since these procedures happened, but I still think about it often.  

A few years ago (ok, maybe more than a few, but who’s counting), I had flu-like symptoms and also some sharp-shooting pains on both the left and right side of my abdominal area that I just couldn’t shake with extra rest and sleep.  My mom (a nurse) suggested that my issues may have been related to my gallbladder, so I took some over-the-counter medicine and my symptoms disappeared.  But a week later, I was back to where I started despite still taking the medication.  I reluctantly went to the doctor (in northeast Ohio), who said that there were many possibilities, but that it could be appendicitis.  My doctor told me that the last time she had seen someone with sensitivity to the abdominal region (i.e., sensitive to the touch), she didn’t send them for a CT scan, but the end result was appendicitis and emergency surgery was performed.  I didn’t have the classic symptoms of appendicitis, but a CT scan was ordered just to be sure.  I won’t bore you with the details, but the CT scan showed that it was appendicitis and I had a scheduled surgery to remove my appendix.  Weeks later the bills started rolling in, including a bill for the CT scan…$1,900.  I’d never had a CT scan before, so I had no idea what to expect, but $1,900 clearly wasn’t it (and I think this was after the PPO discount).    

Two years later, I found myself feeling under the weather.  I went to the doctor and an ultrasound was ordered.  Of course my appointment was on a Friday and it was a holiday weekend, so I had to wait to get the ultrasound, but I had a trip to Niagara Falls planned and I wasn’t cancelling it.  Unfortunately before I could have the ultrasound done, I woke up early on a Saturday morning with more sharp-shooting pains, but this time more in my side and back.  Being out of state, I didn’t know where else to go except to the emergency room at the hospital in Niagara Falls, New York.  The doctor who saw me took one look at me and said “kidney stone, but we’ll do a CT scan to confirm.”  A few hours later a kidney stone was my official diagnosis.  I spent six hours in the emergency room before I was discharged.  By this time I was working in the industry and dreaded the bills I knew I would be getting.  To my surprise, the bills weren’t nearly as large as I had anticipated.  Of course there were three: the hospital, the ER doctor, and the interpretation of the radiology report, totaling a little over $3,000.  This wasn’t nearly as high as I anticipated.  The hospital bill was itemized, and as I read through it, I stumbled upon the CT scan charge… “$234.”  I thought to myself, “ummmm, excuse me?  That can’t be the only fee for the CT scan.”  I decided that this couldn’t be accurate and waited for another radiology bill to arrive.  No additional bills ever arrived.  

I’m not a medical professional and I’m sure there were differences in the CT scans (maybe the type of machine, etc.), but how could I be charged $1,900 for a CT scan and two years later be charged $234 for a CT scan?  Considering the second procedure was in New York, and Niagara Falls is twice the population than my tiny suburban city outside of Cleveland, Ohio, I was sure the New York charges would be higher, but they weren’t.  The difference in charges for the same (or very similar procedure) is an issue that has stayed with me.  

In doing more research and looking at the figures, it’s amazing to see the variances in the cost-to-charge ratio (i.e., how much a provider charges compared to how much it actually costs them to do a procedure) from provider to provider.  The ACA’s price transparency provision really never got off the ground and other proposed bills haven’t had much success – it’s also unclear if the current administration is motivated to support price transparency.  As the self-funded industry looks at cost containment measures as a whole, medical tourism is growing in popularity, especially when there are high value providers that are willing to offer services at lower costs and be more transparent with pricing.  Medical tourism and other cost containment methods, as well as consumer education, can help employer health plans contain costs; however, there is a need to look at the bigger picture and strive for more price transparency to help stabilize and support our fragile healthcare industry.