Survey: Price Information Difficult to Obtain From Massachusetts Hospitals

View media coverage of this report on WCVB-TV 5 Investigates: “Law to keep health care costs down fails to live up to promise,” The Boston Globe, “Hospitals failing to meet state law on price inquiries“, MassLive, “Price shopping cost of MRI at area hospitals? Report finds persistence needed,” WAMC: “Survey Finds Hospitals Struggle To Answer Price Questions.”

Across the country, growth of high-deductible insurance plans is increasing consumers’ demand for healthcare prices

BOSTON – It’s very difficult for Massachusetts consumers to get information on the price of medical procedures, according to a survey of 22 out of approximately 66 Massachusetts acute care hospitals and 10 free-standing clinics in the commonwealth published by Pioneer Institute.

“Most Massachusetts hospitals don’t seem to embrace a culture of price transparency,” said Pioneer Senior Fellow in Health Care Barbara Anthony, who authored the report, “Massachusetts Hospitals Weak on Transparency” with assistance from Scott Haller.  “Most hospitals barely comply with the minimum requirements of state law when it comes to making price information available to prospective patients.”

Pioneer sought prices for one common procedure – an MRI of the left knee without contrast.  While it was ultimately able to get the information from all 10 clinics and 21 of the 22 hospitals, the process was time consuming, confusing and replete with long rounds of telephone tag. Anthony concludes that “busy consumers will not have the time to doggedly pursue this information and instead will likely give up in disappointment and frustration.”

The time it took to obtain the information ranged from 10 minutes in rare instances to six or seven business days, with an average of two-to-four business days.  Clinics were generally more forthcoming with price data than hospitals were. A 2012 state law that took effect in 2014 obligates hospitals, physicians, and clinics to provide prospective patients with prices for a medical procedure within two days. Insurance companies are required to provide the data online in real time.

“Massachusetts Hospitals Weak on Transparency” is the first in a series of surveys. Pioneer is in the process of examining compliance with the law by providers and insurers.

The availability of price information is increasingly important because of the growth of insurance plans featuring deductibles that range from $2,000 to $6,500.  According to a 2015 study by the National Business Group on Health, 32 percent of American companies intend to offer only high-deductible plans this year. A recent study by the public policy group, Public Agenda, shows that as deductibles increase, so do the percent of consumers seeking price information about healthcare services before they obtain those services.  Nationally, 74 percent of those with deductibles of over $3,000 tried to find price information.

Frequently Pioneer survey callers seeking price information were transferred six or seven times in search of someone who could provide the price of an MRI.  Oftentimes, they were sent to yet another organization outside the hospital to get the price for reading the MRI, since hospitals didn’t always volunteer that there was a separate charge for this.

Some hospitals said they needed a diagnostic code to provide the price for an MRI, which is contrary to the plain language of state law and a state regulatory bulletin.

At hospitals, the cost of an MRI for an adult ranged from $700 at a South Shore community hospital to more than $8,000 at some downtown Boston hospitals.  Clinic prices were between $500 and $4,300.

Boston Children’s Hospital was the only hospital in the survey with a description of the state transparency law, an online form and telephone number on its website.  New England Baptist and Cape Cod Healthcare/Falmouth Hospital also have easy-to-find transparency web pages that direct consumers to a phone number.  While state law does not require hospitals to use their websites to promote transparency, Anthony believes most consumers first turn to online sources for such information.

Anthony recommends that Massachusetts hospitals:

• Elevate the importance of price transparency and adopt it as part of a customer service culture
• Develop processes and protocols to easily provide this information to prospective patients
• Train staff in the requirements of MA law
• Disclose all fees associated with a procedure
• Stop demanding that consumers provide diagnostic codes
• Develop improved systems for communicating this information; the current voicemail/telephone tag systems are archaic and frustrating for consumers
• Follow the lead of Children’s Hospital’s by posting information on their websites about the law and how to obtain price information, including the use of online forms and direct service telephone numbers.

The promotion of price transparency in healthcare is part of Pioneer Institute’s recently released book, Agenda for Leadership.

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Barbara Anthony, lawyer, economist, and public policy expert, is a Senior Fellow in Healthcare at Pioneer Institute focusing on healthcare price and quality transparency. She is also a Senior Fellow at the Harvard Kennedy School’s Center for Business and Government where she leads seminars and writes about Massachusetts 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. Among other positions, Anthony served as the Director of the Northeast Regional Office of the Federal Trade Commission in Manhattan, and was a top deputy to the Massachusetts Attorney General. She began her career as an Antitrust Trial Attorney at the U.S. Justice Department in Washington, D.C. Anthony is a well-known consumer advocate and regularly appears as a media commentator on consumer protection and business regulation issues.

Scott Haller is a senior at Northeastern University in Boston where he is pursuing a degree in Political Science. Scott is currently working at Pioneer Institute through Northeastern’s Co-op Program, focusing on research and policy analysis. Prior to that, he worked at the Massachusetts Office of the Inspector General.

Pioneer Institute is an independent, non-partisan, privately funded research organization that seeks to improve the quality of life in Massachusetts through civic discourse and intellectually rigorous, data-driven public policy solutions based on free market principles, individual liberty and responsibility, and the ideal of effective, limited and accountable government.