The authors of a new report – Comparing Prices and Price Transparency Among Top-Ranked Hospitals and Close Competitors – found that many highly respected U.S. hospitals are not in compliance with new price transparency legislation, and there are some dramatic differences in prices among those that are reporting them publicly.
A regulation from the Centers for Medicare and Medicaid Services (CMS) required that, starting January 1, 2021, all U.S. hospitals publicly display the cash price as well as the minimum and maximum negotiated charge for 300 “shoppable services.” During July and August 2021 researchers at Rice University’s Baker Institute for Public Policy evaluated compliance with these requirements among the U.S. News & World Report’s 20 honor roll hospitals in 2020-21 and 41 high-quality hospitals in the same cities. They compared prices for three imaging studies (brain MRI, abdominal ultrasound, and chest x-ray) and three hospital services (basic metabolic panel, electrocardiogram [ECG], and lower joint replacement). Within each of the studied procedures, at most 7 of the 14 cities with top-20 hospitals had minimum negotiated prices that were reported by at least one top-20 hospital and a competitor that was comparable in quality. The top-20 hospital was the highest priced for 5 of 7 cities for ECGs. Yet a top-20 hospital was the highest priced facility in only 1 of 5 cities for both MRIs and joint replacements. For a handful of cities and procedures, the top-20 hospital was priced much lower than its competitor(s), or there was wide price disparity between top-20 hospitals in the same city. Top-20 hospitals were more likely to report cash prices, but they were orders of magnitude higher than their minimum negotiated price.
Many highly respected U.S. hospitals are not in compliance with new price transparency legislation, even though the prices of reporting top-20 hospitals are not systematically higher than competitors with comparable quality. Full price transparency by all hospitals would aid patients and payers in identifying price outliers and choosing the most cost-effective providers.
- Comparing Prices and Price Transparency Among Top-Ranked Hospitals and Close Competitors. Rice University’s Baker Institute for Public Policy. May 12, 2022.