New Data Exposes Scammy Hospital Pricing; Now Let's Crowdsource Some More

from the it's-a-step dept

Fri, May 10th 2013 2:14am — Mike Masnick

A few months ago, we wrote about Steven Brill's amazing article in Time Magazine about hospital billing. As we noted at the time, the story confirmed what many people believed: that healthcare is a giant economic scam, and it's often the hospitals (not necessarily the insurance companies) who are driving the massive increases in costs. A big part of the scam is the fact that hospitals don't reveal their price list -- known as the "chargemaster." It's all a giant secret. There's no such thing as comparison shopping. There's simply no data anywhere.

Well, that may be changing. The US government just released data on what various hospitals charge for various things, along with how much Medicare actually pays in return. This has quickly resulted in people noticing massive differences in pricing for the same treatment in different hospitals (including, at times, hospitals very close to one another). This release definitely provides some significant data about just how massively hospitals are overcharging for things, even if most patients never pay the listed fees.

Still, it's not quite enough. Brill has responded to the release by noting that while this is a big deal and can be quite helpful in highlighting how broken the system really is (and hopefully will lead to a lot more reporting on the subject), it could go much further:

The feds need to publish chargemaster and Medicare pricing for the most frequent outpatient procedures and diagnostic tests at clinics—two huge profit venues in the medical world. But an even bigger step toward transparency would be collecting data that Medicare doesn’t have: exactly what insurance companies pay to the various hospitals, testing clinics and other providers for various treatments and services.

After all, as the hospitals themselves concede in downplaying their chargemasters, these insurance prices are the ones that affect most patients.

And that is one price list where there is close to zero transparency.

While hospitals and insurance providers clearly will not want to give up that information, Bill points out that patients do find out this information, so perhaps we should crowdsource the data:

So even if insurance companies don't want to participate, Brill writes, states could crowdsource price information from patients:
...state pricing centers could gather the information from patients who volunteer, in exchange for a promise that their names won't be used, to submit their Explanations of Benefits. After all, a hospital or insurance company can't claim a patient can be prohibited from talking about or making public his or her own bill.

For a market to work in any effective manner, pricing information must be clear. It's not that way at all in healthcare, and it needs to get that way fast if we're ever to get healthcare pricing under control.

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Filed Under: chargemaster, crowdsourcing, data, healthcare, healthcare costs, hospital pricing, medicare, steven brill

44 Comments

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Reader Comments

The First Word

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in my nightmares, I'm an American, and then... i get SICK.

—Anonymous Coward

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Jeremiah, 10 May 2013 @ 2:44am

Yup
I think a bigger problem is useless tests that doctors will perform just for the hell of it. It's as if they are being told to get as much out of a patient as they possibly can. I recently had a seizure due to low blood sugar (I'm diabetic), and while I was out of it they ran me through a CAT scan, EKG, 3 MRIs, and a spinal tap.... When all I needed was a large shot of sugar. When I came to, my wife told me everything they had done and I was instantly mad that they had just ran me through every procedure they could think of when the cause and nature of my condition were very well known and easily fixed.
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James T (profile), 10 May 2013 @ 3:19am

Copyrights
We can crowd source but we can't publish the data since the hospital must have a copyright on it, and most likely will exercise their rights.
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Anonymous Coward, 10 May 2013 @ 3:25am

this is what happens when an industry has what has basically been for decades a monopoly. people cant go anywhere except to hospital for operations. when the information over charges is kept secret, no one has any choice of where to go to get the best care at the best price. when the information is released, in comes choice, out goes at least part of the monopoly! so much better to then have competition because that brings in better standards, if a hospital is giving good treatment, good after care and good prices, it will be used, otherwise it wont. all industries need to operate in a similar manner, encouraging competition, removing monopolies and introducing choice. the entertainment industries is an area that would be better following this and Congress would do well TO STOP KEEP GIVING MONOPOLIES TO INDUSTRIES THAT THEN STIFLE COMPETITION AND INNOVATION IN RETURN!!
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jackn, 10 May 2013 @ 3:35am

Re: Copyrights
I fail to see this angle. You arent copying their work. Just their prices. It pretty common in other industries to let the customer know the price of what they are buying.
Theyve got a good scam going for now.
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Anonymous Coward, 10 May 2013 @ 3:55am

In Boston I was charged $4000 for a 20 minute, noninvasive test that costs $129 in Zurich.
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Ninja (profile), 10 May 2013 @ 3:59am

After all, a hospital or insurance company can't claim a patient can be prohibited from talking about or making public his or her own bill.

I smell bogus trademark and DMCA claims coming =)
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Sunhawk, 10 May 2013 @ 4:25am

Re: Copyrights
One interesting tidbit about copyright is that it does not include "facts, ideas, systems, or methods of operation" (from http://www.copyright.gov/help/faq/faq-protect.html).

As the link says, "secret ingredients" and the like would be filed under trade secrets... which has a somewhat different set of rules that aren't quite as... helpful.
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Andrew (profile), 10 May 2013 @ 4:25am

Re:
Yeah, either that or lawsuits for exposing trade secrets. Sue the site operators (who probably won't have the money to defend themselves as it's all volunteer work). Also throw in a discovery motion to find out who's submitted their bills to the site and then cancel their policies for violating their insurance contracts.
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Andrew (profile), 10 May 2013 @ 4:31am

Re: Re: Copyrights
The issue isn't whether there is a valid copyright claim; the issue is whether the collators / site operators (who, realistically, would be the ones sued) have the money to defend themselves against a suit (filed in a jurisdiction as inconvenient for them as possible) and the stomach to risk $150k fines per work infringed (probably each bill submitted, as they're going to be unique to each patient).
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Anonymous Coward, 10 May 2013 @ 4:36am

Re: Re: Re: Copyrights
Copyright on an invoice?

Are you insane?
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Anonymous Coward, 10 May 2013 @ 4:40am

Re: Yup
my doc gave me a useless blood test a few years ago...turned out i had cancer and needed a kidney removed. i was completely asymptomatic, and likely would have continued to be until it was to late.
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Anonymous Coward, 10 May 2013 @ 4:44am

Re: Re: Re: Re: Copyrights
Yes ... I do believe they are.
They could get therapy, but that is waaaay expensive.
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Anonymous Coward, 10 May 2013 @ 4:47am

Is there an app for health care costs by location?
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Vidiot (profile), 10 May 2013 @ 5:04am

Entrepreneurial docs, too
To complete the moneygrubbing portrait of US healthcare's failings, be sure to read Dr. Atul Gawande's New Yorker expose' comparing health care costs in Rochester, MN, home of the Mayo Clinic, to dirt-poor Hidalgo County, TX. Predictable, right? Scores of top Mayo experts, incredible high-tech facilities, highly systematized; vs. a cobbled-together network of individual practitioners, and patients who can barely afford to pay. Except the reality is backwards... costs incredibly less to be treated in a well-run, expert system, mostly because in the unorganized environment, each and every practitioner has opened a freestanding clinic or specialty in a strip mall, and each is scamming federal reimbursement right up to the legal limit... and beyond. Kickbacks, payoffs, gaming the system; given the right unregulated environment, greedy providers will go for the gold every time.
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Akari Mizunashi (profile), 10 May 2013 @ 5:08am

This isn't going to change a thing. Having read some articles on this yesterday, the most laughable comment was that "By displaying their prices, customers can then choose what facility they want to visit."

Bullshit.

Sorry to curse, but these legislators have no clue what they're talking about (no surprise there).

Anyone who has insurance knows we're locked into a very specific group of health care facilities. In order to save money, we're required to stick with these facilities and physicians.

And the hospitals know it, which is precisely why they charge what they do.

Should the law pass, I still won't have a choice to select the hospital which charges less for the same procedure.

But thanks, government, for pretending this is an issue Americans need so they can sit back and fume they can't make a choice because their insurance prevents it.
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Lucy, 10 May 2013 @ 5:21am

If someone wanted to share their billing info to participate in crowdsourcing, where should the information be sent to. Is there an information collecting place yet?

I wouldn't let any ideas of how hospitals will try to keep their privacy regarding pricing prevent any efforts to start revealing the big picture.

The days of hospitals seeing the sick as patients has long been replaced with the business of healthcare and customers. Administration has trumped doctors and nurses for a long time.
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James T (profile), 10 May 2013 @ 5:22am

Re: Re: Re: Re: Re: Copyrights
To be clear I don't think they hand much actual standing here, but I believe no matter what information is collected that some Hospital somewhere will make claims against it and sue. At that point the question will be who has the bigger guns John Q Public vs MegaHospital Incorporated and their insurance companies lawyers.
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Bengie, 10 May 2013 @ 5:28am

Re:
Making numbers up, but idea still applies..

You may be able to pay the $129, but the 9 other people who come in for the same procedure won't pay it, so they make you pay for them by jacking the rates.
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Bob V (profile), 10 May 2013 @ 5:28am

Re:
Even if I had the data, and I had insurance, and I had every other possible means to allow me to chose the location I'd still be screwed for the same reason most of the county is stuck with only one broadband provider. There's no other option. Unless you live in a large city there's a good chance you have one hospital in the region.
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Anonymous Coward, 10 May 2013 @ 5:46am

Re: Re:
Yes, not to mention most states/areas are heavily dominated by 1 to 3 health insurance providers who cover almost everyone with insurance. So you really don't have much of an option from the health insurance end either.

And then there's specialty care. I was born with congenital heart problems, and normal cardiologists know ZERO about congenital heart problems because everyone used to die very young who had such a problem.

Two years ago I landed in the hospital with stomach problems (ulcers were blocking almost the entire path from my stomach to the rest of my digestive system, the medicine to treat it wasn't working). The first hospital I went to was right next to my home. That hospital's doctors were all ready to do an MRI to find out the exact problem and do surgery to fix me, but the cardiologist, knowing nothing about congenital heart problems, didn't feel comfortable caring for me, and wouldn't approve anything. So they had to transfer me to another hospital.

While that other hospital did cure me with surgery eventually, they took forever, and moved so much slower, to the point that we started to openly wonder if they were moving slow on purpose to milk as much money as possible from the insurance company (because I was requiring several bags of expensive IV fluids a day, it wasn't until after I was well enough to not need them anymore that they seemed to actually start pushing to get me out of there sooner rather then later).
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That One Guy (profile), 10 May 2013 @ 6:01am

Re: Re: Re: Re: Re: Re: Copyrights
That might have worked before the internet, but now the threatened individual has another option other than folding: go public. 'Yeah you could drag me to court to keep how much you billed me for what secret, but if you do that I'll go public with the fact that you're suing me to keep my bill, that I paid, secret just to cover up your insane charges, and at that point there won't be enough PR experts in the state to restore what that will do to your reputation.'

Unless their lawyers are completely insane or stupid, I think at that point they'd probably drop the threats.
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Doug B (profile), 10 May 2013 @ 6:03am

Re: Yup
Sure. And if they had avoided the tests and you had died of something the tests would have found, they could very easily be facing a malpractice lawsuit. It's not greed generally that causes this, but a CYA due to lawsuit lottery.
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Anonymous Coward, 10 May 2013 @ 6:17am

in my nightmares, I'm an American, and then... i get SICK.
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Rob, 10 May 2013 @ 6:21am

Re:
Hospitals aren't always monopolies. And even if they are, they're not government-sanctioned (and regulated) monopolies like the power company. Even in the mid-sized city I lived in several years, there were two different entities operating the 6 hospitals there. And within 15 miles, there were others. So there was choice . . .

But without a price list, you can't comparison shop, even for planned care. And if you can't comparison shop, then there's no incentive (or any reason at all) to compete.
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dennis deems (profile), 10 May 2013 @ 6:22am

Re: Re: Yup
There are several orders of f'ing magnitude between a blood test -- and a CAT scan, EKG, 3 MRIs and a spinal tap for christs sake
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Wally (profile), 10 May 2013 @ 6:25am

Keep in mind everyone that Medicare and insurance fraud is committed by hospitals....I assure you that insurance companies will do anything within their power to help lower your costs.
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Ninja (profile), 10 May 2013 @ 6:31am

Re:
Health care is not some simple business where you can let market forces work precisely because of physical restrictions. What could be done?

- a public health system that competes with the private (transport included)
- escalate taxes for expensive hospitals
- downright punish abusers with fines
- tight regulation (ie: forbid charging more than the market average for medicine and others while leaving internal costs such as the appointments with the doctors or lodging/accommodations when needed and always to a limit that can be discussed)

You see, capitalism doesn't care if you die, it cares about profit. Sometimes societal rejection will prevent some predatory behavior. Other times regulation is needed.
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Wally (profile), 10 May 2013 @ 6:32am

Re: Re: Re: Yup
Calm down y'all...the type of fraud mentioned is mostly stiff like charging us as out patients on our bill, but charging us as over night stay. It happens all the time. My mother works under contract with a company in the state if Ohio and a few other states here in the US to basically recoup and recover bad claims so that hospitals stop doing this.
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Wally (profile), 10 May 2013 @ 6:34am

Re: Re: Yup
It's not about testing they do on you...it's about how they fill out the insurance forms.
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Wally (profile), 10 May 2013 @ 6:36am

Re: Copyrights
Or it could be a GIANT HIPA violation considering that a hospital is bound by law to follow HIPA.
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Wally (profile), 10 May 2013 @ 6:43am

There is a need for emphasis here
The type of fraud mentioned is mostly stuff like charging us as out patients on our bill, but charging us as over night stay on our insurance forms. It happens all the time. My mother works under contract with a company in the state if Ohio and a few other states here in the US to basically recoup and recover bad claims so that hospitals stop doing this. So don't anyone dare try to fucking conflate this issue to copyright. Hospitals have to follow strict guidelines concerning a patient's personal information which is why this data WILL NOT BE RELEASED PUBLICLY
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The Logician (profile), 10 May 2013 @ 7:01am

What is most illogical is the presence of a for-profit medical system in the first place. Human beings have an inherent right to be healthy, It can be said that any society can be judged by the way it treats its sick and its elderly. America, unfortunately, has not done well in that regard. A nonprofit, patient-oriented system which utilizes not only allopathic medicine but alternative natural approaches as well with equal measure would be far more effective and humane. Dr McCoy once referred to the existing for-profit system as "medievalism," and he is correct. Human lives have been reduced to an expendable commodity in this system, and both hospitals and pharmaceutical companies must be fully investigated and held accountable for their actions.
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gorehound (profile), 10 May 2013 @ 7:23am

If this is going to be Crowdsourced I will put up all the Bills I get as I have Illnesses which are life long physical sicknesses.
I like this.someone said what if it is Copyrighted......Well it will get Crowdsourced anyways legal or illegal.
We are all being taken to the cleaners and we are going to get this all in the open.
To bad if you do not like it.The Public will really want to know if they are being thieved or not.
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PRMan, 10 May 2013 @ 7:58am

Re: Re: Copyrights
It's not a HIPAA violation if the patient shares the data they paid.
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Suzanne Lainson (profile), 10 May 2013 @ 9:06am

At least three variables to compare
In order to comparison shop, a person has to take into account at least three variables, which makes shopping for health care more difficult than shopping for a dress.

1. The price.
2. The quality of care.
3. Do you actually need it?

I've been shopping online for dental care lately and have found relatively little helpful information.

Some websites post prices, but usually they are average prices (not what individual dentists charge).

Some dentists have lower prices than others, but the most recommended dentists seem to be the least in need of using competitive pricing. So you wonder if lower cost also means lower quality.

Finally, other than the basics, a lot of dental services are pitched like services and the websites tell you why you should get a procedure done. Trying to find unbiased info is hard. And, unfortunately, some dental services are trendy. They are popular now, but then in ten years from now, you find out whatever you were talked into having done in the past is no longer recommended.

I suppose ultimately I prefer to get info on how to avoid needing health care in the first place.
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Suzanne Lainson (profile), 10 May 2013 @ 9:14am

Re: At least three variables to compare
I realized, when I was shopping around for dental care, that I view it like auto repair. You sometimes get overcharged, or told you need something you don't, or the work that is done fails. If you are lucky, after listening to recommendations from friends and the community, and trial and error on your part, you find someone you trust who will tell you want you actually need and don't need and will charge you a reasonable rate.

It's not easy finding the right person to work on your car or on your body.
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Anonymous Coward, 10 May 2013 @ 10:44am

Re: Re: Re: Re: Yup
How about charging consultation fees for doctors you never meet? Charging for nurses care for procedures that one does at home by themselves (home hemodialysis)? Etcetera ad nauseum.
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John Fenderson (profile), 10 May 2013 @ 2:44pm

Re: Re: Re: Re: Yup
Calm down y'all...the type of fraud mentioned is mostly stiff like charging us as out patients on our bill, but charging us as over night stay.

I'm confused by this comment. You can't be arguing that the type of fraud you mention is somehow better and not worthy of outrage, can you?

In any case, the problem of doctors ordering useless procedures is enormous. And it's mostly a US problem, related to two things:

How we pay doctors. They get paid by the procedure instead of a flat rate salary. The more tests a doc orders, the more money he makes.

Malpractice lawsuits. If the doctor fails to detect a condition that a test would have revealed, he can be subject to a malpractice suit. Even if he wins, his rates go up. Therefore, the common CYA procedure is to order every test that might be remotely related to the symptoms the patient is presenting.

The worst part of all this isn't really the money (as bad as that is), but what the AC mentions. All tests have a false positive rate, and some of those useless tests will indicate a problem that doesn't exist, resulting in treatment that is unnecessary. And sometimes harmful.
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Anonymous Coward, 10 May 2013 @ 3:04pm

Re: Re: Re: Copyrights
No it's not a HIPA violation if YOU share that your dick broke, or that you had a colonoscopy...but it certainly isn't some sort of copyright game for HOSPITALS to NOT share that data publicly. If they shared it publicly due to the demands of others....that would be a HIPA violation.
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Anonymous Coward, 10 May 2013 @ 3:07pm

Re: Re: Re: Re: Copyrights
And I quote:

"We can crowd source but we can't publish the data since the hospital must have a copyright on it and most likely will exercise their rights."

See...turning it into a copyright game..
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Anonymous Coward, 10 May 2013 @ 3:09pm

You know I kind of find it sad that people would be dumb enough to crowd source such vast amounts of their OWN PERSONAL DATA CONCERNING MEDICAL HISTORY.
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RoboGal, 10 May 2013 @ 4:59pm

From the other side...
I've worked at an office, and the factor that isn't really discussed is insurance companies to the provider. I fully agree that overcharging and fake or unnessicary procedures are wrong, but the thing that people don't understand, is that providers don't have a price list to share. If someone calls to ask how much would it cost me for a _______? The answers are: what's your insurance company? What plan? What group? We can check with the company and call you back... Most companies give providers an estimated, not guaranteed, list of what they consider the price to be, and they will pay a patient's coverage of that. Providers can't charge above this price, which is usually very little- not in a "cant afford a lambourgini" way, but in a "covering cost of materials while having lights" way. Some companies don't even give that list: we have to figure it out the same way this crowd sourcing group wants too, we just have more data (and no, we can't share, due to HIPPA). This isnt a case of doctors and hospitals having one big tidy price list they arent sharing. It's not always the doctors setting the price, and when it is, many times, it's what's needed to keep the lights on, and usually pay for extra employees to understand and deal with the complexities of every individual insurance company. I'm not saying every doctor is broke, or even ethical, and I'm not saying this isn't a problem, because it is. But the problem is with the whole system, which includes insurance companies too, not just the more convient target of all doctors as a whole.
(Wow, that turned into a rant there...oops!)
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DP2u, 21 May 2013 @ 1:45pm

Re: From the other side...
This argument does not hold true for the uninsured. Doctors and hospitals should be able to provide pricing information to the uninsured in advance or providing services (except emergencies). As Steven Brill's article makes clear, it is the uninsured and underinsured who are being taken advantage of by health care providers.
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MST, 29 Aug 2013 @ 6:13pm

Try this one out
https://pricinghealthcare.com/

Seems to be getting at what the article is describing...
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