The Maryland Health Care Commission, the state's independent regulatory agency, is unveiling a website on which people scheduling a hip replacement, knee replacement, hysterectomy or vaginal delivery can see price differences among different providers for the same procedure.
The state site is meant to give consumers a tool to compare prices and quality on four common medical procedures at hospitals around the state that patients otherwise would have difficulty finding on their own.
By showing ranges of costs — hip replacement surgery in Maryland, for example, can differ by as much as $20,000, the site data shows — state officials said they hope to prompt discussions by patients about doctors’ recommendations about where to schedule a surgery and perhaps create incentives to adjust prices.
“We’re undergoing major changes in the health-care sector in the economy right now, and there’s a lot of uncertainty,” Maryland Health Care Commissioner Robert Moffit said. “We think it’s important for Americans to understand from a reliable source what it is they are buying and how much it really costs.”
But an expert in health-care costs was skeptical that prices posted online could drive down costs.
Kevin Volpp, director of the University of Pennsylvania’s Center for Health Incentives and Behavioral Economics, said that on a big-ticket item like a joint replacement even patients with high deductibles probably would meet that threshold and with insurance coverage would not face major added costs out of their own pockets.
Volpp said that because many patients would not be hit in their wallets, they may come to regard price as a measure of quality and seek the more expensive options.
“As a general point, I would agree that it’s good for people to know more than less about the price and quality of different options,” Volpp said. But “I think it’s very likely that it’s going to drive people to higher-priced providers. People think higher prices equate with better quality. Patients have no reason to not think that’s true.”
The state’s site, called Wear the Cost, uses information culled from private insurers’ quarterly reports to the commission from 2014 and 2015. The state intends to expand its data to include Medicare next year.
Visitors to the site can also compare the quality of care based on rates of complications and readmissions. So, a patient needing a knee replacement could see that Sinai Hospital costs $32,493 and has a 14.5 percent readmission rate, compared with University of Maryland Baltimore Washington Medical Center, which charges $23,872 and had zero readmissions, the site data shows.
While some private companies have worked with states on price transparency, and many insurance companies have ways for their members to compare prices, what Maryland is doing is rare, health advocates say.
Niall Brennan, of the Washington-based Health Care Cost Institute (HCCI), which has a partnership with four major insurance companies to pool data to analyze medical costs, said pricing is the biggest problem in American health care.
Consumers who get their health insurance through their employers may not grasp the costs of a procedure, Brennan said. Medical "providers pretty quickly figured out that consumers were immune to the price of health care because it was all being picked up by insurance companies, which led to rapidly increasing prices," he said.
The Centers for Medicare and Medicaid Services projected that national spending on health care would grow from .8 percent in 2015 to nearly 3 percent in 2025, largely because of the rise in prices.
As consumers choose higher-deductible insurance plans for lower monthly premiums, they bear more of those costs. The Kaiser Family Foundation reported that payments toward deductibles rose 256 percent from 2004 to 2014, while in that same decade, wages increased by 32 percent.
Volpp said a better option to induce cost drops would be for insurers to offer incentives to members to choose a less expensive provider that still delivers quality care.
But Robin Gelburd, president of FAIR Health, a nonprofit that helped New York build a database for cost comparing that was unveiled in mid-September, is encouraged that policymakers are beginning to take price transparency more seriously.
"For some reason our health care system evolved to a point where there was a curtain closed between price and clinical decisions," Gelburd said.
“I think what needs to be underscored is that the time has come; there is a growing demand for sunlight in health-care prices that enables people to make sound decisions,” said Gelburd.
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