Pioneer Institute Asks, Where's the Transparency on Medical Fees in Mass.?
A 2019 federal law requires hospitals to make prices for 300 shoppable services available online in a “consumer-friendly format,” but a Pioneer Institute survey of 19 hospitals finds that information on discounted cash prices—the price most likely to be charged to consumers paying out of pocket—was unavailable at seven of those hospitals.
Of the 300 services for which prices are required to be made available online, 70 are dictated by the Centers for Medicare & Medicaid Services. The survey, “Massachusetts Hospitals: Uneven Compliance with New Federal Price Transparency Law,” prepared by Pioneer Senior Fellow Barbara Anthony and Research Associate Serena Hajjar, looked at 35 of the 70 services at the 19 hospitals, and found that compliance rates ranged from 60 percent (Emerson Hospital) to 97 percent (Mass General).
* * * * *
[Although not an institution surveyed by Pioneer, Milford Regional Medical Center provided the following information to Franklin Observer:
According to Milford Regional Medical Center Vice President of Finance & Chief Financial Officer Beth Cadle:
Milford Regional Medical Center posts to its website annually comprehensive machine-readable files with all items and services in the Hospital’s service listing and 300 shoppable services, in compliance with Federal Price Transparency Laws. The files are prepared using the fees that Milford Regional has contracted to receive from insurance companies for services provided to its patients. Also included are the uninsured/discounted cash prices, the minimum negotiated price, and the maximum negotiated price. Milford Regional prides itself on providing low-cost, high-quality care to its patients.
Here is a link to the that information found on Milford Regional’s website:
* * * * *
“Our earlier work found disappointing compliance with Massachusetts’ 2012 healthcare price transparency law,” said Pioneer Executive Director Jim Stergios. “And now we find that compliance with the federal law isn’t much better. We are not insensitive to the challenges providers are facing, but it is disappointing that compliance with the law has not budged much since 2017, when Pioneer began monitoring hospital price transparency efforts.”
Seven hospitals that didn’t provide discounted cash prices online: Boston Children’s, Falmouth, Holyoke Medical Center, MetroWest Medical Center, Mount Auburn, New England Baptist and St. Vincent’s.
Among the 12 hospitals that did make at least some discounted cash prices available, there continue to be vast pricing disparities. For example, an MRI of a brain scan before and after contrast was nearly $5,300 at UMass Memorial Hospital in Worcester, but less than $1,500 at Carney in Boston. An abdominal ultrasound was $1,663 at Tufts New England Medical Center, but just $374 at Signature Health Brockton. Finally, an MRI of a leg joint was more than $3,400 at Mass General and Brigham and Women’s, but $775 less than 10 miles away at Carney.
“The disparities we observe strongly suggest a market dominated by the systems that are able to maintain prices above competitive norms,” said report author Barbara Anthony. “This is why it’s crucial that consumers, employers, benefit managers and insurers have ready access to provider prices.”
Lack of transparency drives up healthcare costs. A 2019 Pioneer survey found that 70 percent of respondents wanted to know the price of a procedure before receiving it. Of Massachusetts residents with health insurance, 11 percent have deductibles of $3,000 or more.
The new federal law (the Public Health Service Act, passed in 2019 and effective in January 2021) also requires that hospitals make all their prices available in machine-readable formats (MRF) for the benefit of employers, competitors, insurers, governments, and researchers. This format is not intended for consumers.
Massachusetts hospitals do quite well when it comes to providing prices in the MRF format. Only two hospitals 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, it does offer an opportunity for large purchasers of healthcare services to harness and utilize such data to their advantage.
The report recommends that:
- Hospitals designate a single administrator to be in charge of price transparency
- The federal government provide specific guidance to hospitals regarding how to make websites “consumer friendly”
- The federal government should step up compliance actions, and
- Massachusetts state government create incentives for hospitals to comply with state and federal price transparency laws.
“While some of these recommendations are similar to others we have made regarding compliance with state transparency laws, we hope that this new federal law will encourage a real commitment to consumer price transparency,” added Anthony. “Pioneer would be pleased to collaborate with providers on such endeavors.”
About the Study Authors
Barbara Anthony, lawyer, economist, and public policy expert, is a Senior Fellow in Healthcare Policy at Pioneer Institute. She was also a former Senior Fellow and Associate at the Harvard Kennedy School’s Center for Business and Government where she researched and wrote about Massachusetts market reform and healthcare cost containment efforts. She served as Massachusetts Undersecretary of the Office of Consumer Affairs and Business Regulation from 2009 to 2015 and has worked at the intersection of federal and state commercial regulation and the business community for many years. Anthony’s work has appeared in numerous state and national publications.
Seher Chowdhury graduated this Spring from the Boston University School of Public Health (BUSPH) with a Masters Degree in Public Health; her areas of specialization include Health Policy & law and Epidemiology and Biostatistics. She has been a Pioneer Research Assistant in Healthcare Policy since June 2019. She has worked extensively in the area of healthcare price transparency along with Pioneer’s Senior Fellows. She participated extensively in Pioneer’s first state poll and analysis of consumers’ attitudes toward healthcare price transparency. Outside of price transparency, her areas of interest include Medicaid reform and expansion; reproductive and minority health access and equity; and the intersection of health, human rights, and bioethics. Seher graduated from the University of California at Los Angeles (UCLA) in 2018 with a Bachelor of Science degree, where she completed a major in Biology and minor in Asian Languages (Korean concentration).
MissionPioneer Institute develops and communicates dynamic ideas that advance prosperity and a vibrant civic life in Massachusetts and beyond. VisionSuccess for Pioneer is when the citizens of our state and nation prosper and our society thrives because we enjoy world-class options in education, healthcare, transportation and economic opportunity, and when our government is limited, accountable and transparent. ValuesPioneer believes that America is at its best when our citizenry is well-educated, committed to liberty, personal responsibility, and free enterprise, and both willing and able to test their beliefs based on facts and the free exchange of ideas.