Pricing in healthcare has always been very confusing for healthcare providers and patients alike.   Several factors influence the price of any healthcare service provided, location, cost, and expected reimbursement to name a few.  Patients and families of patients find it frustrating to determine the associated costs or out-of-pocket expense for health services.  The same frustration is felt by many providers of service.

For many consumers the phrase “price transparency” means that the price quoted for a service is exactly what you pay for a service.  Price transparency allows consumers to compare prices and use pricing information in their decision-making process for services.  In the healthcare industry, however, “price transparency” does not necessarily mean that the price quoted is the price paid.  Prices for tests and procedures are influenced by a variety of discounts.  Discounts are applied to healthcare services based upon the health plan coverage carried by the patient.  To further complicate the pricing scenario, discounts vary according the contract established between providers and health plans.

It should be no surprise as consumer out-of-pocket expense increases, the demand for greater transparency in pricing rises.  Most consumers want to know what they will owe before services are rendered.  To be able to compare prices among hospital organizations and calculate out-of-pocket cost provides needed information to further consumer education.

The Center for Medicare and Medicaid Services (CMS) took the first step on the road to greater price transparency.  Effective January 1, 2019 hospital organizations were mandated to “provide a list of the hospital’s standard charges for items and services provided by the hospital, including diagnosis-related groups”.

Dixie Platt, Indiana Hospital Association Communications and Federal Relations Vice President, says, “We definitely know that people want to better understand their potential out-of-pocket costs when they have a health care procedure.  We think it’s good to have the information there.  It is important to understand the limitations.”

Decatur County Memorial Hospital posted their prices complying with the request from CMS. Items listed on the link are listed with a service code, description and price.  Consumers may find this listing confusing because there are several descriptions that are similar as well as several prices from which to choose.  It is a good first step but the organization recognizes there is still more to be done to help our patients understand what their out-of-pocket costs will be.  New tools and software have been made available and DCMH is reviewing what’s available to help us with pricing challenges.

According to President and CEO Rex McKinney, “Hospital pricing is very complex and no one pays full price.  Hospital finance and billing practices have been adjusted over the years to ensure hospitals are appropriately compensated for services provided.  We strive for high quality clinical services which require an investment in extensive technology, devices and supplies.”

People generally want to better understand the charges associated with health care services and ultimately their out-of-pocket expenses.  It is an ongoing effort for most hospitals to develop the resources and tools to help patients better understand the complexities of health care pricing.