The Trump administration deserves credit for trying to remove the curtain surrounding hospital pricing practices. To say these numbers have been historically opaque is to insult the term opaque. By comparison, finding KFC’s secret recipe is a no-brainer.
But as any senior living operator who has dealt with hospitals can attest, many of them don’t like being told what to do, or how to do it.
So it hardly should come as a surprise that when they had to comply with a pricing mandate, they essentially flooded the zone. Many hospitals have posted pricing sheets known as charge masters. Yes, these itemized spreadsheets name prices by the thousands and, in some cases, tens of thousands. They are not linked to specific surgeries, diseases or conditions, however. For the purpose at hand they are worse than byzantine. They are useless.
Far be it from me to suggest that most hospitals really don’t want anyone to be able to pin them down on costs. Or to suggest that many pulled a real weasel move here. Let’s just say that what they delivered hardly aligns with the spirit of the project here.
So how do we go about untangling this mess? There are a few ways it could be done. Here’s one:
First, let’s assume the pricing sheets now in play essentially are worthless. Might as well throw them away.
Second, let’s not let hospitals have the leverage here. Instead, let the federal government take center stage. The Centers for Medicare & Medicare Services has both the information and ability to publish average costs for common procedures. Particularly when those procedures are covered by Medicare. I say let them do it. CMS also could put the muscle on private insurance companies to do the same.
As a result, we would be able to get much closer to knowing actual prices for what are essentially commodity services.
Would that be a perfect fix? Of course not. But it strikes me as better than the alternative, which is to try to make sense out of the gobbledygook hospitals are providing.
