Healthcare Pricing Transparency Expectations + Communication

Have you ever been to an exclusive restaurant or boutique clothing store and noticed the menu or tags don’t include the price of the items?  I’ve joked before “If you have to ask, you probably can’t afford it”.  In healthcare, the price of procedures can be discouragingly hard to obtain, and yet you may need to move forward regardless of your ability to pay.

The US medical system is built on a framework of prices and insurance price adjustments that cause the same procedure to have many different costs depending on the location, provider, or health insurance.   According to a recent Pioneer Institute study “MRI price estimates ranged from $400 at Huntington Hospital in Los Angeles to $4,544 at New York City’s Montefiore Medical Center.”  And for the most part, price has had surprisingly little impact on the medical decisions made by doctors.  John Henning Schumann wrote in an NPR story “There was no formal training in medical school about health care spending or the cost-effectiveness of various tests and treatments. Instead, we were taught to ignore costs and focus on the best care and treatment we could provide.”

Now that many Americans have high deductible insurance plans, and more organizations are self-funding their employee health plans, more people are interested in knowing the cost of a procedure.   But the system lacks transparency due in part to a mechanism by which to share this information.  A report by the Pioneer Institute indicates that during their research “complete price estimates could not be obtained from 14 of the 54 hospitals despite as many as 11 calls.”

Massachusetts law requires providers to inform consumers of the price of procedures upon request and before providing them.  This is so rarely done that some hospitals in the Pioneer Institute study did not know what to do when called about a price request. “There are a lack of procedures within hospitals to help consumers who are looking for price estimates, front-line administrative staff have little idea where to direct requests for the price of a service or procedure, and consumers are sometimes transferred and/or cut off multiple times.”

Self-funded plans were at the center of the US Supreme Court’s decision ruling not to require data submission into a national “all-payer claims database” in September 2015.  Essentially Liberty Mutual (as a self-funded employer) argued that companies should only need to comply with ERISA and not 50 states’ separate rules on health payment data collection.  The Court agreed.  It furthermore decided that without self-funded plans – and the 60% of the US population self-funded plans cover – participating, the database would be incomplete, and therefore not worth compiling.  The Court does offer a lengthy explanation of the benefits of a national data collection system as part of its response and notes that self-insured plans usually have an Administrator to process their claims and that the Administrator could turn the data over to the state with little extra effort.  That a national database is not going to be the path forward is a major blow to transparency.

What can we expect going forward?

  • The ACA (Obamacare) includes provisions for transparency in pricing. This doesn’t seem to have had much impact yet, but we may see this in the coming years if insurance rates continue to rise and employees are increasingly taking on the expense of premiums and high deductibles.
  • “There’s an App for that” – or at least one is coming soon. Medefy is working to create an App that will “bring true price transparency to the medical services and provider market.”
  • If employers and employees continue to request pricing information and make purchasing decisions based on the information, providers will be forced to find more efficient ways to provide this information. It may become part of hospitals’ marketing to their communities.


Self-funded plans in particular should be encouraging employees to keep costs in mind when receiving medical care.  Educating employees and putting pressure on providers will help to move the trend toward transparency.



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