We know that, in the aggregate, health care costs us a lot: about $2.5 trillion annually, or 17 percent of our gross domestic product.
But what about all the things that go into that $2.5 trillion? How much does each test, treatment and medical procedure actually cost? The Government Accountability Office recently tried to ask hospitals and doctors that question. It wanted to go beyond the numbers that insurance subscribers usually see, like the co-pays and deductibles associated with a given procedure, and get the total dollar cost. The agency didn't have much luck.
Even with a number of health cost transparency efforts underway, it's still incredibly difficult to find out how much money is spent on specific medical treatments.
For its study, the GAO contacted 17 randomly selected hospitals to ask how much a knee replacement, a very common surgery, would cost. Here's what they heard back: "None of the hospital representatives could provide a complete cost estimate for a full knee replacement, meaning the price given was not reflective of any negotiated discounts, was not inclusive of all associated costs, and did not identify consumers' out-of-pocket costs."
Physicians did slightly better: when the GAO contacted 18 doctors to ask how much a diabetes screening would cost, four came up with a complete price estimate.
Health industry players are trying to make prices more transparent but not having huge success. The GAO surveyed eight health cost transparency efforts that range from an online Medicare tool to compare hospitals to a tool operated by the health plan Aetna, called the "Member Payment Estimator," that provides cost estimates for more than 500 physician and hospital services.
Across the board, the GAO review doesn't come up with much to celebrate. Only two provide an estimate of the total cost of a given episode of care.
There's a whole host of obstacles that stand in the way of transparent health care pricing. A big one has to do with health providers long considering health care costs proprietary. Both insurers and hospitals have strong business incentives not to publish health cost figures. "If a hospital was aware that another hospital negotiated a higher rate with the same insurance company, then the lower-priced hospital could seek out higher negotiated rates which may eliminate the first hospital's competitive advantage," the GAO explains. On the flip side, insurers don't want their competitors to know if they're getting the same hospital services for a cheaper price.
This could start changing soon: 30 states are weighing legislation to increase price transparency in health care, according to a recent review in the New England Journal of Medicine. The end game of these initiatives isn't exactly clear. Would consumers change their health care behaviors if they had more information on cost? "Most patients are insured, so they pay very little of the cost of their medical care, which dramatically weakens or eliminates their incentive to choose a lower-cost provider," Harvard's Anna Sinaiko and Meredith Rosenthal have written. Other factors, like quality and convenience, also play a role in our health care decisions. If state legislatures do start passing these laws, we might soon know more about how much cost matters when it comes to where Americans get care.
