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Hospital price search ‘frustrating’ for consumers, report says

Pioneer Health study also examines significant price disparities

(041018 Burlington, MA) Lahey Hospital and Medical Center in Burlington on Tuesday,April 10, 2018. Staff Photo by Nancy Lane
(041018 Burlington, MA) Lahey Hospital and Medical Center in Burlington on Tuesday,April 10, 2018. Staff Photo by Nancy Lane
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Finding prices for health care procedures on Massachusetts hospital websites can be a “circuitous or frustrating process,” despite a 2019 federal law requiring hospitals to make all prices available online in a consumer-friendly format, according to a new report.

The Pioneer Institute studied a sample of 19 hospitals in Massachusetts to gauge compliance with the Public Health Service Act, which took effect in January 2021 following the adoption of regulations by the federal Centers for Medicare and Medicaid Services. Researchers said the hospitals examined were “of all sizes in urban, suburban, and rural areas across the state.”

In addition to finding “great variations in prices for several common procedures,” researchers determined that discounted cash price information — the rate a hospital would charge individuals who pay cash — was unavailable for 37% of the hospitals in the study.

“Even among hospitals that post some discounted cash prices, there are varying rates of compliance with posting prices of all the procedures for which it is mandated,” the Pioneer Health report said. “Compliance rates ranged from a low of 60 percent to a high of 97 percent.”

Researchers found price variations ranging from nearly 100% for an abdominal ultrasound to over 300% for an MRI of a leg joint, according to the report, which was authored by Barbara Anthony, a former state undersecretary of consumer affairs and business regulation, and Serena Hajjar.

Other variations cited in the report include the price of a mammography of both breasts, which ranged from a high of $962 at Lahey Hospital & Medical Center in Burlington to a low of $392 at South Shore Hospital in Weymouth. The price for a routine electrocardiogram fluctuated from a high of $239 at Tufts Medical Center and $223 at Brigham and Women’s Hospital and Massachusetts General Hospital to a low of $86 at Carney Hospital and Morton Hospital and Medical Center.

“These disparities portray a market dominated by certain systems that are able to maintain prices above competitive norms,” the report said. “This is why provider price transparency is crucial information to which consumers, employers, benefits managers, and insurers should have ready access.”

The report, released on Thursday, features a menu of recommendations, including putting one administrator in charge of price transparency at each hospital, stepped-up enforcement of federal pricing disclosure rules, and guidance from the federal government about ways to make pricing websites consumer-friendly. At the state level, the report suggests creating incentives to improve hospital compliance rates.

“Lack of healthcare price information may not be bothersome to some consumers because they have good healthcare insurance and therefore believe the price to be unimportant,” the report said. “This is a mistake, however, because we all pay for rising healthcare costs directly or indirectly through higher insurance premiums. In many cases, however, the lack of price transparency does present problems because of health insurance with high deductibles or situations where consumers are underinsured or uninsured. The lack of price transparency has unfortunately become embedded in the American healthcare system.”

While hospitals are coming up short on pricing disclosure for consumers, researchers found Massachusetts hospitals “do quite well” in meeting a requirement that all of their prices be available in a machine-readable format “for the benefit of employers, competitors, insurers, governments, and researchers.”

“Only 2 in our sample of 19 do not make this data available in MRF style. While a number of national surveys have been critical of this requirement and the massive amount of data it produces in an unorganized fashion, there is an opportunity here for large purchasers of healthcare services to harness and utilize such data to their advantage,” the report said.

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