Doctors say future of price transparency appears cloudy

Physician Executive, Jan-Feb, 2008 by Carrie Weimar

In principle, allowing patients more access to health care pricing information has wide support.

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In fact, a majority of physicians say there is a need for even greater transparency in the pricing of services and procedures.

But where the trend is headed remains a big unknown.

Some physicians say that health care is long overdue for price transparency. They say it will ultimately lead to lower prices and better understanding among patients, doctors and health care providers alike.

Others say it's demeaning to the medical profession.

And still others believe it will shift focus to cost at the expense of quality, which may ultimately prove dangerous for patients.

These were just a few of the responses to the American College of Physician Executives' recent survey on price transparency. An overwhelming majority--73 percent--of the survey's 686 respondents said they believe patients should be able to price shop for health care treatments and procedures as they do for other goods and services.

But in comments provided along with the survey, many physicians expressed skepticism about the trend. Several echoed the views voiced by one doctor, who was unsure how prices should be calculated.

"Transparency is more like translucency," the doctor wrote. "What you see is only a superficial look at pricing. Even for experienced health care professionals, the information is difficult to get and interpret through member or consumer channels. And it's virtually without any quality measures."

As it stands now, some physicians say they are caught in the middle between frustrated patients and unhelpful service providers. They say hospitals, insurance companies and pharmaceutical giants must lead the way toward more access to price information.

Most survey respondents agreed that there's a long way to go before a true method for gauging the sometimes mysterious world of health care costs is developed.

As one doctor wrote, "While consumers should always have the ability to shop around based on price, it will require an extensive amount of education for the average citizen to understand why there are differences in the cost of health care between institutions."

Don't ask, don't tell?

For years, many Americans did not worry about the cost of health care services, relying instead on insurance providers to cover most expenses. But as the number of uninsured Americans has hit unprecedented levels--47-million by some accounts--there's greater skepticism about health care costs among the public.

Some employers and individuals are now offering consumer-driven health care plans that allow patients to keep the money set aside annually for health care expenses, even if it is not spent during the year. Suddenly, there's more incentive for consumers to shop around for the best prices.

Most health care professionals are responding to the increased demand, the survey showed.

While most of the physician executives who responded to the survey said their organizations provide price information to patients, the majority act only in response to a patient's inquiry.

About 48 percent of respondents said they would provide price information to patients if they ask for it. Only about nine percent provide price lists to all patients, and another five percent post prices on their Web sites for anyone to see.

About 17 percent of doctors said their organizations are working on providing a list of prices to their patients but hadn't yet completed it. Finally, about 23 percent said they had no plans to provide price information.

Health care professionals apparently aren't trading information about the trend. Nearly half of physicians said they didn't know if their competitors were providing price information to their patients.

The demand for more information is just starting to grow, according to survey results. About 45 percent of physicians who completed the survey said they've seen more patients ask for price information. About 39 percent said there hasn't been an increase.

Many of the doctors who said they support price transparency listed fairness as one of the determining factors in their decision.

"Let them choose," a doctor wrote. "Some will remember the adage, 'You get what you pay for.' Welcome quality transparency. Legislate against fraud."

Some doctors said the emphasis on openness eliminates some of the unnecessary mystery in health care costs and fosters a better relationship between doctors and patients.

"I believe health care will be viewed with the respect it deserves," a physician wrote. "Patients feel we hide things from them. We are dealing with a more sophisticated and educated population. Let them be a part of the decision and we will receive more of their confidence and, subsequently, loyalty."

"Patients should be able to comparatively shop and health care providers should be able to charge what the market will bear," another wrote. "One may choose to pay more for a Lexus than a Toyota because it is better. There is no such opportunity in the health care market except private pay."