What's preventing the hospital from at least telling me the baseline price without 340b rebates and then listing those rebates separately? Does the hospital even know the baseline price without 340b rebates? If not, doesn't that strike you as a problem?
> Hospitals pay different prices for the same pharmaceuticals.
Right, that's exactly what I said:
> It sounds like within the industry, hospitals are facing the same problems as consumers, and they need more price transparency from their suppliers as well. Hopefully increased requirements towards hospitals to explain their pricing will lead to hospitals demanding slightly more transparency and slightly more consistency from the other companies they work with.
They have the transparency to supplier costs but it's so variable and granular that it's not meaningful to discuss.
Drugs in a clinical setting are priced on a per unit basis (which might be per mL), usually with a flat markup over cost. In practice, that can mean a patient getting IV drug treatment could receive two different charges for the same drug in the same day. If it's a hard to find drug and they deplete batch 1 from supplier A, then administer batch 2 from supplier B, the cost per unit could change by multiplies.
Using the earlier airline example, it's like trying to say what the cost of a generic flight is. The answer is always going to be it depends.
Combining that kind of cost structure with a transparency requirement means you get unusable, and as parent commenter mentioned, laughable results. It's not malicious compliance driving this garbage price transparency, it's a fundamental misunderstanding of how the healthcare system works.
> They have the transparency to supplier costs but it's so variable and granular that it's not meaningful to discuss.
Right, so again, exactly what I said:
> It sounds like within the industry, hospitals are facing the same problems as consumers, and they need more price transparency from their suppliers as well. Hopefully increased requirements towards hospitals to explain their pricing will lead to hospitals demanding slightly more transparency and slightly more consistency from the other companies they work with.
jonathan-adly suggests that it's laughable to assume that a hospital could get a predictably priced supply of aspirin from it's suppliers. And I'm sorry, but no it's not. Everybody else has figured out how to do this. The market has already proven that it is possible to predictably price an aspirin tablet for consumers before you hand it to them.
If hospitals can't do that, then it signals that either something is very wrong with how they operate, or (from the sound of things) something is very wrong with their supply chains.
The value here is in asking why hospitals can only provide laughable answers to a question that other segments of the health industry have been competently answering for decades now. I'm not saying it's necessarily the hospital's fault. I'm saying that something is pretty clearly wrong with their model for sourcing even generic drugs, given that they are one the only parts of the health industry that has this problem.
Can't speak to aspirin specifically, but I think generically you're pushing a false assumption. It is not easy for the rest of the health industry to provide stable pricing of drugs, especially for the types of rarer drugs that are administered in inpatient care settings. Go click around GoodRx drug prices and tell me how stable even generic drug prices are. There's a post here on HackerNews every 6 months about the outrageous cost of insulin, one of the most commonly prescribed and readily available pharmaceuticals (within a lot of variation depending on patient needs).
Then how are Rite Aid and my local 7-11 able to do it?
Look, people are pointing me at rare drugs, drugs that don't have generics and that are only available on prescription, people are pointing me at the costs of surgeries and emergency care.
I'm really only asking about the absolute simplest part of this equation. Why can't hospitals predictably price the generic over-the-counter non-prescription drugs that I can buy at predictable prices communicated per-purchase in basically every single grocery store in America? Even GoodRx, for all of the variability on different drugs from different sources, is still able to show the price from each source up front. It's able to pull off transparent pricing.
If hospitals could do even just that, then we could move on and have a conversation about complexity. But they apparently can't even clear the lowest possible bar. Every single over-the-counter drug in a shopping mart will have a price tag on it when I pick it up. It is clearly possible to reach at least that level of competency. We don't even need to talk about the rare drugs or the complicated procedures.
Edit: it occurs to me that you may be focusing on stable, predictable prices over time. To be clear, I'm not even asking for that. I'm asking that at the moment a nurse walks up to me to put an aspirin in my hand, they should be able to tell me what the price is. I'm not asking for standardization across hospitals or static pricing across time, or even consistent pricing across a single visit. I'm asking for the price to be known before the drug is placed in my hand. That is something that pretty much everybody else has figured out how to do, it's the lowest possible bar to clear.
Oh well in that case, you would have to have a totally different conversation about bundled payments.
The price (chargemaster) that the hospital might list for all of the a-la-carte care you're provided is totally separate from how they will get paid on it. If you present at the ER and are triaged with stabilizing care, the nurse can't tell you that price because it will depend on your status at discharge, which is not yet known or in her scope of license to determine. If the doctor sees you and sends you home, that's one price (tied to Medicare outpatient prospective payment system or OPPS). Depending on how severe your issue is, the triaging care, such as pain relievers, may or may not be included in the "evaluation and management" procedure coding level you're assigned. There's one of those codes and typically separate bills for both the facility and the attending physician on your visit. If you're admitted to the hospital, what happened in the ER is not really relevant anymore, because now the facility portion of your care will be paid for based on your diagnosis related group (MS-DRG) at discharge, which has no bearing on how many a-la-carte services/drugs you received. Your insurer negotiates payment per DRG (usually as a spread to Medicare) but the hospital, recognizing that they can get screwed and lose a fortune if they have a really complicated case, will probably negotiate a stoploss provision for "outlier claims", saying something like after $750,000 of billed charges, we don't want MS-DRG reimbursement anymore, we want 35% of billed charges.
The regulation, primarily driven by Medicare, prevents any of this from being simple enough to communicate at point of care.
That doesn't even touch the administrative burden of documenting and collecting on all of that care. If your care wasn't meticulously documented by providers making hundreds an hour to type longform notes, it's essentially free, because no provider will risk billing for care they can't support with documentation. Once insurance pays (or not, they might deny the claim), they will often say "yeah we agreed to pay you x but the patient has 20% coinsurance so here's 80%, you need to talk to him about the rest". The hospital and especially caregivers are not aware of how much of your annual out of pocket max you've spent (thereotically they could check with the insurer, but not realistically in an ER), so maybe you have 20% coinsurance or maybe you don't, only you and the insurance company can realistically know that before the hospital sends the bill.
So now that you've glimpsed one hellscape of a reimbursement scenario, which price did you want the nurse to tell you?
It's totally insane and it all starts with CMS and the insurers. The hospitals would love to simplify and have menu pricing for your care, run your card, and send you on your way. No insurer would contract to pay that way because it would "incentivize the providers to administer unnecessary care".
> If the doctor sees you and sends you home, that's one price (tied to Medicare outpatient prospective payment system or OPPS). Depending on how severe your issue is, the triaging care, such as pain relievers, may or may not be included in the "evaluation and management" procedure coding level you're assigned.
Wait, hold on sec though. I've dealt with navigating inpatient vs outpatient coverage with my insurance compacts. It impacts what they will pay and it impacts what their coverage is, but that's a very different thing than telling the hospital what its prices need to be.
A hospital knows what it wants to charge for an aspirin tablet. Separately, some of that cost is going to be covered by insurance (maybe 100%, maybe 80%, whatever). Maybe there's going to be have to be separate negotiation afterwards to figure out what the insurance is willing to pay. Maybe the hospital won't get to charge what it wants, because the insurance company will whittle them down or move the entire procedure into a separate coding level.
But being able to predict the outcomes of that is more than I was asking. I am fine with a situation where a nurse goes to hand me an aspirin and says, "just so you know, this will be $5, though of course your insurance may end up covering it or negotiating you into a different code where you pay something lower." Because, again, other industries have figured out how to do this. A psychiatrist will not be able to tell you before the visit how much your insurance is going to pay, or even what the final price that they negotiate with your insurance will be. But you'll still know the general price of a session beforehand, the base amount that they want to charge.
Is there a reason why a hospital can't even tell me even just what the maximum amount is that the aspirin they're about to place into my hand would cost inside of their walls?
> That doesn't even touch the administrative burden of documenting and collecting on all of that care. If your care wasn't meticulously documented by providers making hundreds an hour to type longform notes, it's essentially free, because no provider will risk billing for care they can't support with documentation. Once insurance pays (or not, they might deny the claim), they will often say "yeah we agreed to pay you x but the patient has 20% coinsurance so here's 80%, you need to talk to him about the rest". The hospital and especially caregivers are not aware of how much of your annual out of pocket max you've spent (thereotically they could check with the insurer, but not realistically in an ER), so maybe you have 20% coinsurance or maybe you don't, only you and the insurance company can realistically know that before the hospital sends the bill.
This still feels like a lot of words to essentially agree with what I was originally saying -- that the entire process is not used to price transparency, and that this is not the result of an inherent complication in healthcare itself, it's the result of a system that at every level has gotten used to the idea that consumers shouldn't get to know what they pay, and that prices should be determined behind closed doors, not through an open market process.
If from the beginning, nobody tolerated getting mystery bills days or weeks after a hospital visit, would insurance companies have felt this comfortable demanding that hospitals follow a specific payment structure? Would hospitals have been as willing to accept supply contracts where the prices fluctuated so much?
After all of this conversation, we're still kind of back to the original point, which is that it's really good to put pressure on this system, that transparent pricing showcases the various issues with the system in a very public way, and that shining light on those issues and making them obvious to consumers may lead to improvements across the board. If the problem starts with insurance companies, then great. Attempts at transparent pricing open the door for public conversations where the public and regulatory boards ask "why is the insurance company refusing to pay the transparent prices that the hospital is offering?"
I mean, you bring up the (very common) scenario of insurance companies and hospitals disagreeing about what a procedure should cost and only agreeing to pay part of it. That's something that happens because there isn't a market rate for any of these procedures, and there's honestly no way to determine whether the insurer or the hospital is being reasonable. Price transparency helps with that, it gives us a more accurate picture of what the normal variation in prices are for a procedure across the entire industry.
I think that it might be coming across that I blame hospitals entirely for this, and I really don't, I'm focusing in on hospitals to make the point that the pricing outcomes are worse in hospitals than in most other industries. I understand that insurance makes this more complicated, I understand that suppliers make this more complicated, I understand that hospitals are trying to figure out how to bill as much as possible within the scope of regulations that dictate some price limits depending on context. What I'm saying is that price transparency regulation puts pressure on those systems to get better, and that it's good to put pressure on those systems to get better, and (most importantly) that there's nothing about medical care that inherently means those systems need to be this way. We have other examples of parts of the industry that have proven that this kind of complexity for the end consumer could be lower. We could have a medical system with transparent billing, the complications you're bringing up are regulatory, administrative, and contractual; they're not laws of nature. They're complications that were invented by human beings (not necessarily by hospitals specifically) and spread across the entire industry, because there was no incentive not to invent them.
Yes, insurance companies also need transparent pricing for hospitals. That doesn't mean that hospitals don't need transparent pricing for consumers.
> Hospitals pay different prices for the same pharmaceuticals.
Right, that's exactly what I said:
> It sounds like within the industry, hospitals are facing the same problems as consumers, and they need more price transparency from their suppliers as well. Hopefully increased requirements towards hospitals to explain their pricing will lead to hospitals demanding slightly more transparency and slightly more consistency from the other companies they work with.