Michigan Hospitals to Post Prices Online

Published November 1, 2007

To meet consumer and business demands for more information on the rising costs of health care, starting next January nonprofit hospitals in Michigan plan to list their prices for common medical tests and procedures.

The Michigan Health & Hospital Association (MHA), which represents the 146 nonprofit hospitals statewide, will host a voluntary price database on its Web site at http://www.mha.org.

The price list will include at least 50 medical tests, procedures, and operations, such as CT scans, which make up as much as 80 percent of hospital business, MHA Executive Vice President David Seaman told the Detroit Free Press for an August 16 story.

Positive Development

The result is a win-win situation for Michigan consumers.

Greg Scandlen, president of Consumers for Health Care Choices, a group based in Hagerstown, Maryland, said he’s glad Michigan has joined the growing list of states publishing their hospital prices.

In the early 1990s, Wisconsin passed a legislative mandate to provide claims and billing data to the state, and in 2003, the Wisconsin Hospital Association took over that project and used it to develop a Web site to provide consumers with hospital prices for various procedures.

“I would say a good one-third of the states have programs like this, sponsored by the state hospital associations,” Scandlen said.

John R. Graham, director of health care studies at the Pacific Research Institute, a think tank in San Francisco, agreed, but noted it might be easier said than done.

“It is not that easy to post hospital prices online,” Graham said, pointing out a procedure might have several prices, depending on who’s being charged.

Improving Situation

But if patients find the lists useful, Graham said, price transparency will increase their decision-making ability and satisfaction. Currently, he said, most insurers and providers benefit from disguising prices, which leads to a murky health care atmosphere.

“It looks like this is changing, and I am tentatively optimistic,” Graham said. “But there is still more talk than action.”

Any amount of transparency is better than none, Scandlen said, but he questioned whether Michigan’s posted prices are those actually paid by patients and health plans, and whether they are related to actual costs of care or just some arbitrary number based on Medicare rates of payment.

“Many hospitals charge so-called ‘self-pay’ patients 300 percent and 400 percent more than a PPO patient for the exact same service,” Scandlen pointed out. “We will be anxious to see if this sort of price transparency results in changes to these practices.”

Dr. Sanjit Bagchi ([email protected]) writes from India.

For more information …

“State hospitals are to list prices online,” by Patricia Anstett, Detroit Free Press, August 16, 2007: http://www.freep.com/apps/pbcs.dll/article?aid=2007708160380