OSPIRG urges Oregon lawmakers to support new legislation introduced today in the Oregon State Legislature that will empower consumers to take personal responsibility for their own health care costs by improving access to health care prices. Senate Bill 891, introduced today, is sponsored by State Senators Elizabeth Steiner Hayward, MD (D-Beaverton) and Brian Boquist (R-Dallas).
Medical prices are often hidden until patients receive a bill, and many bills contain extra charges and surprising fees. Senate Bill 891 addresses these problems by requiring Oregon health care facilities to post their prices publicly, both at the facility and online, and to provide real-time price estimates for consumers on request.
“With Oregonians picking up an ever-greater portion of their own health care costs in the form of higher deductibles and coinsurance, it’s more important than ever for consumers to know the price of health care up front,” said OSPIRG Health Care Advocate Jesse O’Brien. “We all know that health care still costs too much. The least we can do is make sure health care facilities post their prices, like any other business.”
Research shows that a lack of public information on the price and quality of health care services hampers competition and contributes to excessive spending by consumers, insurers, taxpayers, employers and other payers. The Institute of Medicine estimates that inflated prices due to lack of competition and excessive price variation cause $105 billion in waste in health care spending each year. [1]
SB 891 will start addressing these problems by doing the following:
- Requiring health care facilities to post their prices publicly, both online and in a physical location at the facility, for the top 100 inpatient and outpatient procedures. Since prices for health care services can vary depending on a patient’s health coverage, SB 891 requires facilities to post a list of all of their prices for the top insurers and public programs in Oregon.
- Requiring health care facilities to provide price estimates in real time upon request, including an estimate of any additional fees that may not be included in the posted price, such as out-of-network fees.
“As a physician, I think my patients deserve to know the price for health care services so they can be empowered to make better-informed decisions,” said Senator Steiner Hayward. “Senate Bill 891 will strengthen the doctor-patient relationship by enabling physicians to start a dialog with patients about value in health care.”
“Senate Bill 891 is about personal responsibility,” said Senator Boquist. “If we want Oregonians to have the tools they need to take charge of their own health care, we must take action to make sure consumers can access accurate, actionable information about health care prices.”
For more information about SB 891, check OSPIRG’s fact sheet, available at http://bit.ly/1wRNBMF
[1] The Institute of Medicine’s full report, Best Care at Lower Cost: The Path to Continuously Learning Health Care in America, is available at http://www.iom.edu/reports/2012/best-care-at-lower-cost-the-path-to-continuously-learning-health-care-in-america/report-brief.aspx
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OSPIRG is a non-profit, non-partisan statewide consumer organization. Please visit us at www.ospirg.org
In 2006, health economist Uwe E. Reinhardt wrote, "The Pricing of U.S. Hospital Services: Chaos Behind A Veil of Secrecy" in Health Affairs. He pointed out that California law requires hospitals to post the cost of hospital services (the so-called chargemaster) for public review. But these lists only add confusion because allowed amounts are much less than the billed chargemaster amounts. That's because third party payers negotiate prices with hospitals that are protected as "trade secrets."
Hospitals have historically profited with unrealistic chargemaster prices when insurance company were forced to fork over big bucks for out-of-network benefits covered by Cadillac Plans. Unfortunately, chargemaster prices have lead to bankruptcy (a very sick way to discharge debt) when the uninsured patient or under-insured patient with limited network/benefits is discharged from the hospital.
While SB 891 bill would also require posting of the top 100 outpatient charges, the same logic would apply. And besides, the Cadillac Plan is dead. Health plans are shifting more costs to the individual. It's challenging enough to wonder what providers are in-network and what benefits are covered. It's another to wonder what the "co-insurance" for any procedure would be as that is determined as a percentage of the allowed amount.
We need full transparency of negotiated prices.
Alternatively, Oregon could follow Maryland's lead and we might see some bending of the cost curve. That's because Maryland has an "all-payer hospital payment system"--where every provider in the state is required to charge every payer the same price for the same service. The “reasonable costs” of uncompensated care are recognized in payment rates, and all payers contribute equitably to covering these expenses.
See:
http://content.healthaffairs.org/content/28/5/1395.full
http://projectmillennial.org/2013/05/17/chargemaster-tomfoolery-policy-responses-and-unintended-consequences-in-four-charts/
Kris Alman