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Outrage of the Month: Secrecy in Health Care Pricing

Health Letter, January 2014

By Michael Carome, M.D.


If you’re not outraged,
you’re not paying attention!

Read what Public Citizen has to say about the biggest blunders and outrageous offenses in the world of public health, published monthly in Health Letter.

Among the many problems with the U.S. health care system today is the disturbing lack of transparency when it comes to the prices of even the most basic medical services. This problem was highlighted once again in a study published online on Dec. 2, 2013, in JAMA Internal Medicine. The study revealed that most hospitals in at least one major metropolitan area in the U.S. appear unwilling or unable to prospectively provide patients with the expected charges for basic, routine medical tests.

For this simple study, a researcher, pretending to be a patient without health insurance, called 20 different hospitals in the Philadelphia area and inquired about the price for an electrocardiogram (ECG) if she were to pay cash. (An ECG is a simple, routine medical test used to measure the electrical impulses in the heart. It is performed thousands of times daily at hospitals and clinics around the country.) A separate telephone call was subsequently placed by the same researcher to ask the cost of parking at the facility.

Among the 20 hospitals contacted, only three (15 percent) provided the price for an ECG, with the charge ranging from $137 to $1,200. In contrast, information about the cost of parking was obtained from 19 hospitals (95 percent), with many hospitals noting that the priced was discounted. The researchers concluded that “hospitals seem able to provide prices when they want to.”

Following the full implementation of Obamacare, there still will be tens of millions of people expected to be unable to obtain any health insurance. Many more people who do have insurance face increasing co-pays and deductibles. Particularly in such a climate, the lack of transparency about the price of health care services, even for the most basic of medical procedures, is unacceptable. Equally troubling is the nearly ten-fold difference in the price of the same basic procedure between the lowest- and highest-charging facilities within the same geographic region.

Opaqueness in the pricing of health care services may benefit the financial bottom line of hospitals, but such secrecy prevents patients and policymakers from making well-informed choices when weighing the costs and benefits of medical care. It ultimately has a pernicious effect on the economics of our entire health care system.

To address this problem in the short term, the federal government should require all hospitals to disclose prices for all medical procedures and services that are charged to patients based on their insurance status. The long-term solution to this and the many other problems plaguing our profit-driven health care system is a national, single-payer, improved Medicare-for-all health insurance system.