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Health Care / Free-Market Reform

Shopping by Phone?

By Elias Tsapelas on Oct 2, 2023
Doctor's Office
New Africa / Shutterstock

Can a fifteen-minute call really save you 15% or more on your car insurance? I’m not sure, but it might significantly lower the cost of your next hospital bill.

It’s been a little more than two years since the federal government began requiring that hospitals disclose their prices in a consumer-friendly format. As of a few months ago, compliance was reportedly still incredibly low. The Centers for Medicare and Medicaid Services (CMS) and the American Hospital Association (AMA) claim that around 70% of hospitals were complying, which is much higher than the numbers we found in our investigation into Missouri’s hospitals.

A recent study in the Journal of the American Medical Association throws some cold water on the supposed success thus far for hospital price transparency. The problem isn’t simply that so many hospitals seem uninterested in complying with the federal rule, or at least complying in spirit. Even the hospitals that are “complying” don’t appear to be publishing their real prices. The report concludes:

Findings of this cross-sectional study suggest that there was poor correlation between hospitals’ self-posted online prices and prices they offered by telephone to secret shoppers. These results demonstrate hospitals’ continued problems in knowing and communicating their prices for specific services. The findings also highlight the continued challenges for uninsured patients and others who attempt to comparison shop for health care.

In other words, hospitals are quoting different prices if you call them than what they’re publishing online. This also means that the federal price transparency rule has not succeeded in making health care services easily shoppable—at least not if you’re only shopping online.

Price transparency is important because it allows patients to know the price of the treatment they’re receiving before getting the bill. Knowing the price can then empower patients to shop around and search for savings. Informed consumers (patients) and market forces can then apply downward pressure on the nation’s constantly rising health care costs. Or at least that’s the idea. Needless to say, for transparent prices to have the desired effects, the posted prices need to be accurate. If they’re not, how can patients, especially those uninsured, make the best financial decision for themselves with that information?

Going forward, it’s clear more needs to be done to ensure patients are armed with the information they need to make their health care decisions, and I’m hopeful Missouri policymakers will take action in 2024. But until they do, be sure to call ahead for your medical procedures just in case.

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About the author

Elias Tsapelas

Director of State Budget and Fiscal Policy

More about this author >
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