Aug 7, 2017

Hospitals hide costs of pricey medical procedures

Sam Jayne / Axios

Hospitals and health care companies often flood email inboxes and wire services with press releases that tout new procedures or devices. The marketing intent is clear — they want to attract patients to their facilities or get the word out on their new technology.

The one thing they don't talk about: the price.

Why it matters: Adopting new technologies contributes a lot to the growth of health care spending. To battle that growth, the health care industry promotes price transparency as a way to encourage competition and lower spending. However, most hospitals and providers really don't embrace price transparency, and continue to advertise the latest procedures with seemingly little regard for costs.

The Sharp Coronado Hospital case: This past July, Sharp Coronado Hospital in California issued a press release that proclaimed it was the "first hospital in the U.S. to perform a general surgery procedure using the new da Vinci X Robotic Surgical System," which is made by Intuitive Surgical. A local NBC affiliate ran with the story, which could be mistaken for a rewritten press release.

Many other hospital systems have boasted about having Intuitive Surgical's robots, which has led to a surgical arms race over the past decade.

Unmentioned in the latest release:

  • The hospital's list price of the robotic surgical procedure (this is what uninsured people would pay).
  • The costs an insured patient would have to pay out of pocket.

Both are still unknown. Tom Hanscom, a Sharp Coronado spokesman, said the list price would be provided if someone makes a formal request for the procedure. And because there are so many different insurance plans (and because private rates are often under gag clauses), he said it's impossible to give a broad number of what the procedure would cost.

"Our intent with the press release was to simply announce we have this new technology at our hospital to treat our patients and nothing beyond that," Hanscom said.

The NYU Winthrop Hospital case: NYU Winthrop Hospital in New York provided the most transparency of the multiple organizations that were contacted. The hospital recently advertised a prostate implant called UroLift. A spokesman said Medicare paid about $1,200 for the initial implant and $900 for each additional one. Commercial rates are proprietary and depend on a patient's copay, coinsurance or deductible, the spokesman said.

Reality check: Price transparency tools are barely used by most people and won't drastically reduce health care spending. Hospitals also don't really want to give out prices or costs even though the Affordable Care Act requires hospitals to inform the public about their charges.

"You're shopping with a blindfold on," said Gerard Anderson, a health policy expert at Johns Hopkins University. "You're shopping with not having both the pricing information and the value information that you need to be an informed shopper."

Press releases about new technologies are just as likely intended to catch the attention of doctors. "You're also not the person typically making the choice," Anderson said. "It's the doctor making the choice on your behalf."

That's not all: The safety and value of technologies that are being heralded are just as vital. Producing and searching for new devices and procedures is a good thing, Anderson said, but the technology should be more than an advertising gimmick and provide more than just a marginal benefit to patients.

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