In hearings on price transparency for healthcare providers before the House Energy and Commerce Subcommittee, economist Gerard Anderson, director of the Johns Hopkins Center for Hospital Finance and Management, testified about the difficulty of publishing hospital prices based on the inscrutable chargemaster file. (Click here to download the testimony.) Anderson told committee members that patients will not be able to decipher the 50,000 items on a charge master file, nor will they be interested in services other than those they personally need--often an unknown until the patient undergoes the procedure. The chargemaster file data are also meaningless for consumers because the prices do not reflect the prices that insurers actually pay, according to Anderson.
Anderson recommended that hospitals report their prices as a percentage of Medicare DRG rates. By looking at the percentage of the Medicare rate a hospital charges for various procedures, the consumer would get a general sense of how hospitals compare to each other and when a hospital’s charges deviate significantly from the norm. Consumers would be able to comparison shop based on how closely a hospital’s charges conform to Medicare rates rather than trying to determine prices for specific services.
