When President Obama signed the Affordable Care Act into law, it came with a raft of lofty goals for improving Americans' access to healthcare -- and slowing the growth of the costs involved. But after years in which politics has slowly whittled away at the law's foundations, the results have been less impressive than hoped.
For example, consider price transparency. If you go to the supermarket and buy chicken breasts, you'll pay the amount printed on the package, plus tax. Go to the hospital for a breast tissue biopsy, and you'll have almost no clue what the price is going to be till you get the bill later. However, the ACA did mandate that hospitals would have to start posting their master lists of baseline charges -- called, simply enough, "chargemasters." And this year, the federal government has finally begun insisting they do just that.
That might sound like progress, but as Motley Fool Answers co-hosts Alison Southwick and Robert Brokamp discuss in this podcast's "What's Up, Bro?" segment, medical care providers have found plenty of ways to keep their pricing opaque, confusing, and in most cases, meaningless. How bad is it? Allow them to explain.
A full transcript follows the video.
This video was recorded on March 5, 2019.
Alison Southwick: So, Bro, what's up?
Robert Brokamp: Well, Alison, besides your voice, sit right back as I tell the tale of Jeanette Parker, a wildlife biologist in Florida who decided to feed a stray cat. Did you hear this story?
Southwick: What? This is not what we agreed upon.
Southwick: Is this really what we agreed upon?
Brokamp: You'll see. We'll get there. I heard about her story recently on NPR in their Bill of the Month series, which is about healthcare costs with the help of Kaiser Health News.
Ms. Parker is driving along in the vicinity of the Everglades, sees a stricken-looking cat, stops at the side of the road, pulls out some tuna -- because, of course, she had some tuna...
Southwick: Yes, you've got to have tuna. You've got to have tuna.
Brokamp: That's right -- and the cat bit her. So since there had been some recent warnings in that area about cases of rabies, she figured she should get looked at. Goes to the local health center. It's closed. Goes to the emergency room at Mariners Hospital, which is part of the Baptist Health South Florida network. She stays for two hours, gets two shots and some antibiotics. Doesn't even speak to a doctor. Goes home. Eventually gets the bill. Do you want to take a guess at how much this bill cost?
Southwick: Oh, it's going to be an insane amount of money, isn't it?
Brokamp: It is. Do you want to guess?
Brokamp: Her insurance covered most of it, but due to the deductible and the copay she still had to pay $4,191.00. The majority of the cost came from the rabies immune globulin, which cost $46,422.
Southwick: Oh my gosh!
Brokamp: The NPR story quotes various resources as saying that the average cost for what she received is around $4,000, so it seems that Mariners Hospital way overcharged her. And in fact, a month later they dropped the price of that shot by 79%, but too late for Ms. Parker and her insurance company.
Why the drop? The hospital didn't explain it, but NPR pointed out that it was right before January and this brings us to a very little-noticed development that happened in the world of healthcare costs. As of January 1st of this year, hospitals are required to post their prices online in a big document called the "chargemaster."
Southwick: No way! Oh, my gosh! I want to google our local chargemaster.
Brokamp: The "chargemaster!" This sounds like a big, giant leap forward in price transparency, right?
Southwick: Yes, absolutely!
Brokamp: Well, it's turning out to be maybe more of a baby step and here's why. In the words of a Kaiser Health News article: "But what is popping up on medical care center websites is a dog's breakfast of medical codes, abbreviations, and dollar signs, in little discernible order, that may initially serve to confuse more than illuminate."
Dog's breakfast? First of all, have you ever heard of that?
Southwick: I have never heard anyone talk about a dog's breakfast.
Brokamp: I never heard of this, either, but apparently it's a British phrase for something that is just a complete mess. It comes from the 1930s and they think the idea is basically like you're cooking your breakfast, your omelettes or something, and it's...
Southwick: Give it to the dog.
Brokamp: ... well, it's so bad it's not fit for human consumption so you give it to the dog. A dog's breakfast. It's a mess. I love it! I have to use it more often.
Southwick: Yes, start using that.
Brokamp: But here's the point. Here's an example from the article of one thing that they found on a company's chargemaster. This comes from Sentara Hospital in Hampton Roads, Virginia -- a $307 charge for something described as "LAY CLOS," and this all is one word here, "HND/FT=<2.5CM." So what is that? It turns out it's a charge for a small suture in surgery.
Southwick: Wow! You get charged by the suture?
Brokamp: Yes. See, that's the point, too. Everything is charged separately, so you have to look up the cost of any medicine they give you. Any blood test they give you. The cost of staying in the hospital. It's not like, "Here's the cost of giving birth at our hospital." It's all different.
Also, what you see listed as the price is what they would charge uninsured people and maybe out-of-network people. Your insurance company has probably, but not always, negotiated a lower cost. And the chargemasters are huge -- up to 30,000 items. So while it is a little step forward, it's still very confusing.
What's the takeaway here?
First of all, some services like rabies shots, immunizations, and vaccinations you actually can get at your local health department, so look it up. Chances are it's going to be much cheaper than going to the emergency room for that. Also, it is good, if you can, to try to compare prices. You can try the chargemaster, but there are also more sites coming up comparing the cost of procedures in your area, such as healthcarebluebook.com and clearhealthcosts.com. And as always, if possible, choose an in-service provider.
Finally, if you see a stray cat on the side of the road...
Southwick: Just leave him alone.
Brokamp: ... just put the tuna down. Walk away. Otherwise you could get bitten and feeding that cat could turn your finances into "a dog's breakfast."
Southwick: There we go!
Brokamp: And that, Alison, is what's up!