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In an effort to understand how the U.S. pays $2.5 trillion a year on healthcare, the Government Accountability Office (GAO) recently asked 17 hospitals how much a knee replacement surgery costs.The Washington Post reports the GAO was looking to get beyond the confusing array of numbers doled out in co-pays, insurance rates, and deductibles to get the total dollar cost.
Of the 17 hospitals not one could provide a solid answer, meaning hospitals have no grasp of all associated costs or patients’ out of pocket expenses.
The response from physicians was slightly more positive. Of the 18 doctors asked what the price of a full diabetes screening would cost, four provided a complete estimate.
Even with the health industry trying to make pricing more transparent, the GAO found that among eight new tools, including a Medicare service that provides cost estimates for 500 hospitals’ services, only two offered the total cost estimate of a procedure.
The Post reports this is a longstanding issue:
There’s a whole host of obstacles that stand in the way of transparent health care pricing. A big one has to do with health providers long considering health care costs proprietary. Both insurers and hospitals have strong business incentives not to publish health cost figures. “If a hospital was aware that another hospital negotiated a higher rate with the same insurance company, then the lower-priced hospital could seek out higher negotiated rates which may eliminate the first hospital’s competitive advantage,” the GAO explains. On the flip side, insurers don’t want their competitors to know if they’re getting the same hospital services for a cheaper price.
The article concludes by pointing out many states are considering legislation to change this practice, but since most patients are insured they’re not likely to bargain shop.
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