0
We're unable to sign you in at this time. Please try again in a few minutes.
Retry
We were able to sign you in, but your subscription(s) could not be found. Please try again in a few minutes.
Retry
There may be a problem with your account. Please contact the AMA Service Center to resolve this issue.
Contact the AMA Service Center:
Telephone: 1 (800) 262-2350 or 1 (312) 670-7827  *   Email: subscriptions@jamanetwork.com
Error Message ......
Research Letter |

Availability of Consumer Prices From Philadelphia Area Hospitals for Common Services:  Electrocardiograms vs Parking FREE

Jillian R. H. Bernstein1; Joseph Bernstein, MD2
[+] Author Affiliations
1student at Haverford High School, Haverford, Pennsylvania
2Department of Orthopaedic Surgery, University of Pennsylvania, Philadelphia
JAMA Intern Med. 2014;174(2):292-293. doi:10.1001/jamainternmed.2013.12538.
Text Size: A A A
Published online

Most people in the United States are shielded by third-party payers from the marginal cost of their health care consumption. It has been suggested that removing that shield would foment concern about price and, in turn, create market pressure to keep prices down.

Nevertheless, however concerned about prices they may be, consumers cannot act on their concerns if prices are not easily available. This point was raised by Rosenthal et al,1 who attempted to find the price for hip replacement and discovered that “many health care providers cannot provide reasonable price estimates.”

Still, it may be incorrect to extrapolate the findings of Rosenthal et al1 to all health care because hip replacement is a complex service. The price of a hip replacement may not be known in advance because costs are higher if a special implant will be needed or if the patient requires a prolonged hospital stay. Furthermore, even if hospitals know their typical cost, they may find it unwise to offer hip replacements at that figure. Owing to information asymmetry,2 hospitals selling hip replacements to all comers at their typical cost might find themselves inundated with patients who suspect that their own costs will be higher.

It also may be the case that hospitals are ill equipped to answer questions about price over the telephone.

To test these hypotheses, the methods of Rosenthal et al1 were used with a variation. We telephoned and asked whether price information could be obtained for an electrocardiogram (ECG)—a procedure with uniform costs and free of adverse selection. Next, we telephoned and asked whether price information could be obtained for the cost of parking at the hospital. The provision of parking prices would suggest that hospitals can indeed answer telephone queries about costs—when they want to.

Twenty hospitals in the Philadelphia, Pennsylvania, area were telephoned by one of us (J.R.H.B.). After connection to the appropriate department, the investigator attempted to determine the price of an ECG; the investigator indicated that she had no health insurance and would like to pay cash. For each facility, the investigator recorded the price or noted that a price was not provided. A second call was then placed by the investigator, who indicated that she was coming for an ECG and wanted to know the cost of parking at the facility. The response to that query was recorded as well.

The City of Philadelphia institutional review boards determined that formal review and approval of this study was not required.

Among the 20 hospitals contacted, a price for an ECG could be obtained from only 3 (Table). Information about the cost of parking was available from 19. Of these, 10 offered either free or discounted parking for visitors.

Table Graphic Jump LocationTable.  Price Information for the Cost of Electrocardiograms (ECGs) and Parking

In response to a telephone query, price information for ECGs—a simple and uniform medical service—was provided by only 3 of 20 area hospitals. This finding goes beyond that of Rosenthal et al1 because they investigated a complex medical service for which failure to provide a price in advance may be more reasonable.

We also discovered that hospitals almost invariably could provide the price of parking and that parking was often discounted. This demonstrates not only that hospitals are able to provide cost information by telephone but, we infer, that they can respond to consumers’ concern about cost.

In short, the findings of Rosenthal et al1 were confirmed and indeed strengthened. Hospitals seem able to provide prices when they want to; yet for even basic medical services, prices remain opaque. Accordingly, medical insurance payment schemes that promote concern about prices without a commensurate increase in price transparency are apt to be ineffective.

Corresponding Author: Joseph Bernstein, MD, Department of Orthopaedic Surgery, University of Pennsylvania, 424 Stemmler Hall, Philadelphia, PA 19104-6081 (joseph.bernstein@uphs.upenn.edu).

Published Online: December 2, 2013. doi:10.1001/jamainternmed.2013.12538.

Author Contributions: Dr Bernstein had full access to all of the data in the study and takes responsibility for the integrity of the data and the accuracy of the data analysis.

Study concept and design: J. Bernstein.

Acquisition of data: J. R. H. Bernstein.

Drafting of the manuscript: J. Bernstein.

Critical revision of the manuscript for important intellectual content: J. R. H. Bernstein.

Conflict of Interest Disclosures: None reported.

Rosenthal  JA, Lu  X, Cram  P.  Availability of consumer prices from US hospitals for a common surgical procedure. JAMA Intern Med. 2013;173(6):427-432.
PubMed   |  Link to Article
Akerlof  GA.  The market for “lemons”: quality uncertainty and the market mechanism. Q J Econ. 1970;84(3):488-500.
Link to Article

Figures

Tables

Table Graphic Jump LocationTable.  Price Information for the Cost of Electrocardiograms (ECGs) and Parking

References

Rosenthal  JA, Lu  X, Cram  P.  Availability of consumer prices from US hospitals for a common surgical procedure. JAMA Intern Med. 2013;173(6):427-432.
PubMed   |  Link to Article
Akerlof  GA.  The market for “lemons”: quality uncertainty and the market mechanism. Q J Econ. 1970;84(3):488-500.
Link to Article

Correspondence

CME
Also Meets CME requirements for:
Browse CME for all U.S. States
Accreditation Information
The American Medical Association is accredited by the Accreditation Council for Continuing Medical Education to provide continuing medical education for physicians. The AMA designates this journal-based CME activity for a maximum of 1 AMA PRA Category 1 CreditTM per course. Physicians should claim only the credit commensurate with the extent of their participation in the activity. Physicians who complete the CME course and score at least 80% correct on the quiz are eligible for AMA PRA Category 1 CreditTM.
Note: You must get at least of the answers correct to pass this quiz.
Please click the checkbox indicating that you have read the full article in order to submit your answers.
Your answers have been saved for later.
You have not filled in all the answers to complete this quiz
The following questions were not answered:
Sorry, you have unsuccessfully completed this CME quiz with a score of
The following questions were not answered correctly:
Commitment to Change (optional):
Indicate what change(s) you will implement in your practice, if any, based on this CME course.
Your quiz results:
The filled radio buttons indicate your responses. The preferred responses are highlighted
For CME Course: A Proposed Model for Initial Assessment and Management of Acute Heart Failure Syndromes
Indicate what changes(s) you will implement in your practice, if any, based on this CME course.
Submit a Comment
Availability of Consumer prices
Posted on January 3, 2014
Michael S. Ellis, MD, FACS
Tulane School of Medicine
Conflict of Interest: None Declared

While I appreciate the efforts by the Bernsteins, Rosenthal, et al in pointing out the difficulty patients experience in trying to learn the "actual cost" of health care by all types of providers, other than the quote by Rosenthal that “many health care providers cannot provide reasonable price estimates,” they did not address "why" this problem exists.The reality is that the “charges” by health care providers are essentially meaningless for determination of actual “cost” to the payers or patients, because patients with any form of “coverage” will have underlying (invisible) “allowables” that determine the true costs of the provider.They did state that "people . . . are shielded by third-party payers from the marginal cost of their health care consumption," but without elaboration.The reality is that most providers themselves don’t know what their third party contracts ultimately “allow” their ultimate reimbursable “charge” to be.Other than for cosmetic surgery or other “non-covered” expenses, providers are hesitant to provide a “cash” amount, because they may subsequently learn the patient did have some coverage that requires the provider to recalculate its “charge”.Sadly, federal and state government (Medicare & Medicaid) REFUSE to release contract “allowables” for all healthcare costs (allowables) EXCEPT for physicians’ fee schedules, which are available on the internet; and private insurers REFUSE to release their “allowable” costs for ALL providers (including physicians, who basically are signing “blind” contracts) citing “proprietary” and “contract” reasons.Providers therefor artificially increase their "charges" to assure they are above the "best allowable," and fear that if a lower price is learned by any payer, it will be labeled their "real" charge and their reimbursement will be reduced to that amount.Additionally, our legal system encourages “high charges” by providers because the “awards” by the courts for injuries is based on “charges,” which inures to the benefit of both the injured party and their attorneys, even if later actual payments to those providers is greatly reduced by “cash” discounts, or deciding not to have the treatments. The only way that consumers will ever know the true “costs” to them/payers is if laws or regulations REQUIRE that all third party payers make available, upon request by physician or patient, the contracted discounts (allowable) for any medical providers (hospitals, imaging, lab, DME, medications, physicians etc.).Armed with this information and augmented by “incentives” to truly “shop” for prices, including Health Savings Accounts for payment of deductibles and co-pays; as well as “premium adjustments” - lower premiums for healthy lifestyle choices (weight, annual examinations and tests, regular exercise, etc.), and higher premiums for poor lifestyle choices (smoking, alcohol, obesity, vaccinations, poor compliance with prescriptive medications, etc.), - an actual improvement in cost and health could result. Michael S. Ellis, MD, FACSProfessorTulane Dept. of Otolaryngology-Head & Neck SurgeryNew Orleans, La 70112-2600msellis@tulane.eduCELL: 504-666-9990

Submit a Comment

Multimedia

Some tools below are only available to our subscribers or users with an online account.

Related Content

Customize your page view by dragging & repositioning the boxes below.

Articles Related By Topic
Related Collections
PubMed Articles
JAMAevidence.com

The Rational Clinical Examination: Evidence-Based Clinical Diagnosis
Original Article: Does This Dyspneic Patient in the Emergency Department Have Congestive Heart Failure?

The Rational Clinical Examination: Evidence-Based Clinical Diagnosis
Evidence to Support the Update