New law aims to increase health care cost transparency

SEATTLE — Starting January 1, 2019, hospitals across the country will be required to publish online a “master list” of all the medical services they provide and their costs.

The federal law, announced in April, is an effort to create more price transparency within hospitals, according to the Centers for Medicare and Medicaid Services.

Washington Attorney General Bob Ferguson told KIRO 7 the new law was a step in the right direction.

“More transparency is a good thing,” he said. “Who hasn’t had the frustrating experience of when they go to the hospital, what’s this going to cost me? With hospitals, it can be very confusing and very unclear, so we think this is a good thing.”

However, Aaron Katz, with the University of Washington’s School of Public Health, says the “master list” could confuse consumers even more. The list only lists how much a service or procedure costs, without factoring in much else.

“The price list isn’t actually necessarily the price that you pay,” Katz explained.

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​He said knowing how much a knee surgery costs, for example, doesn't really help patients who are covered by health insurance.

“Every one of those insurance companies will pay a different price to a hospital,” he said. “It’s so complex for people.”

KIRO 7 asked Claudia Sanders, the senior vice president of the Washington State Hospital Association, how posting prices online will improve transparency.

“I’m not sure this is going to be the best approach,” Sanders said. “Our website is better than what’s going to be available through the new requirement.”

The Hospital Association already has a website that calculates average costs for medical services. The tool also allows people to compare costs to other hospitals.

You can find a link to the Hospital Association's pricing calculator here.

Katz says health insurance is inherently uncertain. He believes the Hospital Association’s website is equally misleading.

“This is even less helpful,” Katz said, “This is not providing you any information about outcomes, about value to you.”

Posting prices online simply cannot be useful without factoring in things like insurance and hospital success rates, according to Katz.

He says a “human connection” is critical when learning about medical service costs.

“I would say, go back to the trite and true. Talk to your doctor. Human connections are critical, and that’s the old way we figured out how to get care,” he said.

Experts also suggest asking insurance providers for a cost estimate.

Under the Affordable Care Act, hospitals already have to make prices public. In 2019, rehabilitation facilities, psychiatric and critical access hospitals will be federally required to post the cost of medical services online. Hospitals will also be required to update the costs every year.

This isn't the only push for transparency by the Centers for Medicare and Medicaid Services. Last month, it announced separate plans that would require pharmaceutical companies to publish prices of drugs in TV ads.