Abstract
Background
The majority of states have enacted price transparency laws to allow patients to shop for care and to prevent price discrimination of the uninsured. In California, hospitals must provide a price estimate to a requesting uninsured patient and cannot bill for an amount greater than the reimbursement the hospital would receive from a government payer.
Objective
To assess the response rate of California hospitals to a patient price request and to compare the price estimates received to Medicare reimbursement.
Design
We sent letters to California acute-care hospitals from a fictional uninsured patient requesting an estimate for one of three common elective procedures: a laparoscopic cholecystectomy, a hysterectomy, or routine screening colonoscopy.
Participants
Three hundred and fifty-three hospitals in California.
Measurements
Hospital response rates, difference between price estimates received, and Medicare reimbursement for equivalent procedures.
Results
Only 28% (98/353) of hospitals responded and their response varied in content. Of the 98 responses, 15 (15%) did not provide a quote and instead asked for more information such as the billing code, 55 (56%) provided a price estimate for hospital services only, 10 (10%) included both physician and hospital services, and 18 (18%) did not specify what was covered. The median discounted price estimate was higher than Medicare reimbursement rates for all procedures: hysterectomy ($17,403 vs. $5,569; p < 0.001), cholecystectomy ($14,014 vs. $7,196; p < 0.001) and colonoscopy ($2,017 vs. $216; p < 0.001).
Conclusions
Current California legislation fails to meet its objective of enabling uninsured patients to compare prices for hospital-based health care services.
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Acknowledgements
This study was not supported by extramural funding. Dr. Mehrotra’s salary is supported by a career development award from the National Center for Research Resources, a component of the National Institutes of Health (KL2 RR024154).
Conflict of interest
This paper is not under consideration elsewhere, all authors have read and approved the manuscript, and none of the authors have potential conflicts of interest to disclose.
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Appendix A. Example Text of Request Letter
Appendix A. Example Text of Request Letter
To Whom It May Concern: |
I am writing to learn how much it would cost to have a hysterectomy at your hospital. I have been having vaginal bleeding for many months and my gynecologist has recommended that I have an open hysterectomy for a large fibroid. Otherwise, I am healthy and I don’t take any medications. |
Unfortunately, I am uninsured and my current employer doesn’t offer health insurance coverage. I have looked into public insurance at my local social services office but I don’t qualify for Medi-Cal. So, I am shopping around to see what I can afford. I was told that under the California law called the “Payer’s Bill of Rights” a hospital must provide a written estimate of the amount the person will be required to pay for care. |
Though it is not urgent, I hope to make a decision on which hospital to go to in about a month. Please send a quote from your hospital and any other information I would need to the following address: [Address omitted]. Although I don’t currently live near your hospital, I am willing to travel in order to save some money. Thank you in advance for your help. |
Sincerely, |
[Patient Name] |
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Farrell, K.S., Finocchio, L.J., Trivedi, A.N. et al. Does Price Transparency Legislation Allow the Uninsured to Shop for Care?. J GEN INTERN MED 25, 110–114 (2010). https://doi.org/10.1007/s11606-009-1176-5
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DOI: https://doi.org/10.1007/s11606-009-1176-5