Dec 1, 2009
Published In: Journal of General Internal Medicine, v. 25, no. 2, Feb. 2010, p. 110-114
Posted on RAND.org on January 31, 2010
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: The authors 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.