Pulse – May 2019

June 10, 2019

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Program notes:

0:10 Federal regulations regarding hospital costs
1:12 CMS mandated charge masters on websites
2:10 May not reflect a negotiation
3:06 Other things involved with care not reflected online
4:10 More complexity
5:06 Advice to patients
6:35 End

Full Transcript:

00:00 Elizabeth Tracey:  Welcome to this month's Pulse, I'm Elizabeth Tracey.

00:03 Redonda Miller: Hi I'm Redonda Miller, the president of the Johns Hopkins Hospital.

00:06 ET: Redonda, this month we're talking about something, that I at least think is rather interesting. The federal regulation that hospitals need to provide price lists so that people can scan those and say hey I can understand what this bill is about. What are your thoughts about that?

00:22 RM: I can certainly understand the intention of the federal government and CMS. Price transparency is pretty key nowadays. Think about the average American and how much each of us are spending on healthcare. Over the last five years we have seen a huge rise in high deductible plans. Almost half of adults in the U.S. now have a high deductible insurance plan where they are paying fifteen hundred dollars or more out of pocket before their insurance even kicks in. For some families it's five thousand. So as a patient who one could argue is purchasing and consuming healthcare, it is really important that you understand what you're paying for and how much.

01:07 ET: Do these price lists that hospitals are obligated to provide health to answer that?

01:12 RM: That is the question. As of now, CMS has mandated that hospitals put their charge master on websites and update it at least once a year. If you've ever seen a charge master, it is sometimes fifty thousand lines of things you might consume in a hospital during your stay with the price besides each one of them. They could be incredibly tedious to go through from a patient, but I think there more issues with them if you don't mind if I elaborate?

01:43 ET: Not at all, please do.

01:45 RM: I think one of the big issues is buying healthcare is not necessarily like buying a car. The price when you walk into car dealer, you see a sticker price on a car, it's not necessarily the price you pay. There's a negotiation between you and the car dealer. In healthcare, it's similar to some degree in the sense that the price you see on that charge master may not reflect a negotiation that occurred between an insurance company and the hospital. A hospital may charge a hundred dollars for this a contract between that hospital and an insurer - says the insurer only agrees to pay fifty dollars and that's what the patient would see. The bottom line is what you see on the price master may not be what you're actually charged via an insurance contract.

02:35 RM: Along the same lines, if we go with car analogy, so to speak. The sticker price when you walk into the car dealer is not always all inclusive. You remember you go back and you want to buy the car, by the way you need to purchase tags, a certificate or maybe there's a warranty you need. The same thing, the charge master for a procedure in a hospital is the hospital charge. But as a patient there may be a physician charge. You need to remember that are other things involved with that care or maybe you leave the hospital and have to go to a rehabilitation stay. There are other aspects of care not reflected online.

03:14 ET: How are we going to answer this? These are certainly questions I think that as a consumer, I would want to discern what I'm really being charged.

03:24 RM: I know it's a difficult question. As a hospital president but also as a physician myself, I would say cost isn't the entire picture because there are more to delivering care. For instance, the numbers on a charge master may not reflect the quality. Is this the surgeon who has done a thousand of these procedures and has excellent outcomes versus someone who has done one or two and the outcomes may be poor. How do you put a price on that? Or the complexity - here I'm coming from a perspective of Johns Hopkins, where we see cases who are often the second or third time the case is being done. For instance, a simple spine surgery somewhere else may have a complication, and they come to the Hopkins Hospital as redo operation, which is much more complex. Finally, there's this trust factor. A patient knowing his or her physician and that trust. So these are all added dimensions of healthcare that are hard to capture in a charge master.

04:25 ET: What is your sense right now of the utility of these things? You may know that federal government recently invited consumers to come on to a website created solely for this purpose and comment one what they experienced with them has been.

04:42 RM: I think that's where we are now. I'm so glad that the government has asked the patient - the consumer what he or she thinks because most will tell you right now that they are not terribly useful to them. How can we improve it? How can we reflect all the different elements that go into pricing healthcare? I do think we owe that to our patients. I really do. So we'll have to work on it.

05:04 RM: In the meantime, if you're a patient I do have some advice that I could offer. That would be to ask questions. If you see a charge on a website that you don't understand, call your insurance company. Go through the details of the procedure with your insurance company, so you have a true sense of what your plan covers and doesn't. That would be a more realistic picture.

05:29 RM: My second piece of advice is if you see a charge or you're worried about needing a procedure and can't pay it, please call the hospital. Our finance department offers all kinds of plans and financial assistance that we can help you work through it so you can afford the care you need. We are prepared to help.

05:48 RM: So those would be two pieces of advice I would offer.

05:50 ET: Those are excellent. What would you say in your estimation as the timeline when all of this might actually get a little more practical?

05:57 RM: I think the public will demand it. I don't see in the near term that out-of-pocket costs for our patients are going down by any dramatic amount. I think our patients will demand it and as I mentioned they deserve it. I'm hopeful the timeline will be measured over the next year too and not more than that.

06:15 ET: Excellent. Thank you so very much. That's this month's Pulse.

06:18 RM: Thank you.

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