Why Is Healthcare Price Transparency So Hard?
Another example comes from a Mount Sinai physician who performed an unusual emergency "limb-saving" surgery at a large system hospital in the area.
"His very grateful patient came to him after her two-day hospitalization and was appalled that the doctor's compensation for the surgery was less than $1,500 while the hospital's was $99,000," says Sonenreich, who adds that the physician and hospital were able to look at the bill and compare what the surgery would have cost at Mt. Sinai. They were tens of thousands of dollars apart "When you have these large systems using that pricing leverage against the insurance companies and them not being motivated to challenge that for whatever reason, then what you have is a great deal of challenge in a marketplace."
Subsidizing the money losers?
Of course, individual examples such as Sonenreich's do not necessarily prove that consolidation is the cause of such disparities in commercial reimbursement. Many hospitals and health systems claim that such large prices help subsidize services that lose money and would not be available if they were not subsidized.
But should commercial customers be expected to contribute to that subsidy? It's an open question, but the fact that such subsidies are not accounted for in the balance sheet means the truth about how much the subsidy system may be needed is elusive, lost in the complexity of reimbursement and the opacity demanded by contract.
One CEO who does not have the problem of subsidizing money-losers is caught in a conundrum. Jane Keller, RN, is CEO of Indiana Orthopaedic Hospital and OrthoIndy, the physician group practice that owns the 37-bed specialty hospital in Indianapolis.
"It's always amazed me how with any other service I know what I'm going to pay for it prior to purchasing. In healthcare it's not as black and white," she says. "A lot of variables go into it, but I really feel like we could do a better job of being transparent with our pricing up front."
Yet there are significant barriers, even for a specialty hospital. Neither she nor her board is interested in being a first-mover in sharing what they're paid by insurers.
"We've spent a lot of time talking about that," Keller says. "We would be willing to share, but we don't want to be the only one out there, so we've held off."
But it's not even that simple, she says; because of insurance contracts she doesn't really have a choice, as the insurers do not want other hospitals to know what each is paid. And while she says she can't quantify it, she knows her hospital's contracts are not as strong as the full-service hospitals.
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