Some Kansas hospitals are flouting a federal rule to publish their prices. Here's how they're doing it.
As researchers, advocacy groups and employers push hospitals to reveal their prices, the industry continues to cloak what it considers trade secrets.
Now — in violation of federal rules demanding hospitals make those figures public six months ago — The University of Kansas Health System, Olathe Health and Children’s Mercy hospital systems still don’t publish them.
They’re joined by possibly thousands of hospitals nationwide and scores in Kansas that haven’t budged since a Trump administration decision took effect on Jan. 1 requiring them to reveal prices they’ve long kept guarded.
“We have not met the deadline. … I guess that makes us in violation,” a KU Health System spokesperson wrote in an email. “We are working on it.”
Other hospitals offered similar comments or noted that they’ve launched interactive web tools that let patients get price estimates for certain services, such as giving birth.
Those user-friendly formats — such as one from KU Health System — for “shoppable” services are part of the same federal rule. But since it is effectively impossible for researchers, employers and health plans to use the tools to study broader trends in pricing, hospitals must also release their prices in machine-readable files that often contain many thousands of lines of data.
“We do not yet have an anticipated date” for publishing, another hospital system said. The Mercy hospital system, not to be confused with Children’s Mercy, operates facilities including the one in Columbus, southeastern Kansas.
Some hospitals seek alternatives to mandate
One hospital system, Olathe Health, argued that launching its price estimate tool and posting a spreadsheet of gross charges is enough to fulfill the rule. But the federal government says otherwise.
Hospitals fought the Trump administration’s rule and tried to block it in federal court, but failed. Now hospitals appear willing to risk nominal fines rather than share prices in a format that experts hope could help corral costs.
The industry claims the numbers could confuse patients about what prices they’ll ultimately pay, since insurers often pick up part of the tab. They also say billing calculations are exceedingly complex, not easy to publish, and that revealing the prices could give insurance companies unfair leverage in future negotiations.
“Our concerns include that the transparency file doesn’t reflect what a patient actually pays,” KU Health System said.
But publishing prices en masse could arm communities with solid numbers to push for better deals on health care. Thousands of people in one Colorado county did just that, banding together to negotiate new prices at a local hospital and save an estimated $2 million last year.
Transparency could also settle arguments about which hospitals offer reasonable prices.
Last year, employers handed over hundreds of KU Hospital bills to the RAND Corp. as part of a major effort to compare prices nationwide. The think tank’s findings suggested KU Hospital was one of the priciest in the country. The KU Health System disagreed.
How many hospitals are out of compliance?
It’s unclear just how many hospitals have released their prices.
Last month, researchers from the University of Minnesota and Harvard University each released studies that involved checking hundreds of hospitals. Their results both suggested that a quarter or fewer of the nation’s hospitals had published everything they should.
Far more had created those interactive web tools. For Suhas Gondi — a graduate student in medicine and business and lead author of the Harvard study — that illustrates hospitals’ resistance.
“They’re OK investing the money to build a price estimator,” Gondi said, “But they’re not OK just posting the spreadsheet.”
Even among those that did post the spreadsheets, the Wall Street Journal found hundreds of hospitals used html code to prevent the price lists from appearing in Google searches.
Early this year, California-based data collection firm Turquoise Health set out to pull together the machine-readable files of every hospital in the country. That massive task requires scouring thousands of web pages month after month to see if more facilities have complied.
“It’s important for people to finally have access to that data,” said Marcus Dorstel, Turquoise’s head of operations. “You might be able to save a couple thousand dollars driving 10 miles down the street for your MRI.”
Turquoise’s latest count: About half the nation’s hospitals have posted some prices, but nearly a third of those didn’t publish everything that the federal rules say they should. Only a quarter of Kansas hospitals hit the mark, as far as Turquoise has found. The company continues to review newly posted files.
Some hospitals post only partial information, not the full picture. The federal rule requires making public not just the gross prices that don’t apply to most patients, but also cash discounts and the prices specific to each health plan.
What will happen now?
No one knows how long it could take for all hospitals to comply.
The federal government has sent warning letters to some facilities, Fierce Health Care reported, but observers remain skeptical that the U.S. Centers for Medicare & Medicaid Services has the bandwidth to police the rule broadly, and they don’t think the potential $300 a day fine for violation generates much urgency.
That “amounts to nothing” for many hospitals, Gondi said.
Given that the American Hospital Association fought the rule in court last year, it’s possible some thought the rule would never take effect.
“Many in the industry hoped this would not come to fruition,” said Jean Abraham, an author of the University of Minnesota study. “But it did.”
Abraham, a professor of health care administration, was a senior economist on the Council of Economic Advisors under the Obama administration. She worked on the Affordable Care Act.
One thing that law didn’t manage to do was slow down the rising cost of care, she said. The transparency rule could shed light on the vast variations in prices that people pay for the same services. Whether that ends up pushing down prices could vary by market, but Abraham said it’s worth trying.
“As opposed to the generalization of ‘Well prices are just so high,’” Abraham said, “Let’s ask, ‘How high are they? And are there other places you could go as a consumer?’”
Celia Llopis-Jepsen reports on consumer health for the Kansas News Service.