Health care|May 30, 2011 7:56 AM

Coloradans to get help shopping for the best deal in medicine

A new Colorado website will allow consumers to compare prices for a multitude of health procedures, like having babies, heart surgeries, knee replacements, cancer treatments, MRIs and mammograms. Photo by Nate Griggs/Flickr (Used with permission under Creative Commons license).

Want to know how much it costs to have a baby? How about replacing that blown-out knee, or clearing up your vision with laser surgery? Want to know which facility in your community charges the most – and the least?

In Colorado, good luck finding out. Hospitals, clinics and other medical providers have hugely varying prices for medical procedures and services, yet rarely reveal them to patients up front.

Now, under a new state law, a Colorado organization is creating a database that will allow patients to shop around for health services – much the way people can price-compare gasoline, automobiles and groceries.

“I find it fascinating we make all these grandiose claims about the need to get [health care] costs under control, but we actually have no bloody idea of what the costs are and I don’t think the world understands this,” said state Sen. John Morse, a Democrat and chief Senate sponsor of the Colorado law. “So yes, we need to control costs. But first we need to know what those costs are.”

A recent Colorado Public News investigation revealed the Coloradans can pay up to $3,460 for a basic shoulder MRI than can be found elsewhere for as little as $450. Medical professionals say the MRI, or magnetic resonance imaging test, which is used to diagnose injuries, is essentially the same service at every location.

“The system is not working well,” said Phil Kalin, executive director of the Center for Improving Value in Health Care (CIVHC). That’s the public-private partnership that is overseeing what is currently called the “All Payer Claims Database.” The organization’s communications and marketing director, John McCracken, notes that they are likely to rename the website to something jazzier before it is up and running in spring of 2012.

Under the law, health care payers must submit information on the cost and type of service they have provided to patients. That information will be put into a website, where consumers will be able to compare average charges for a multitude of health procedures, like having babies, heart surgeries, knee replacements, cancer treatments – and, yes, a basic shoulder MRI.

Similar to shopping for any other product, patients should be able to compare the quality of the types of health care services they are seeking. They could select the least expensive service, or opt for a doctor or facility that provides a higher level of specialty, but costs more. Advocates also note the information will provide a clear picture of how health care is being dispensed in Colorado.

For example, administrators will be able to determine patterns, such as a patient who has been to hospital emergency rooms five times for the same problem, but never to a primary care provider for prevention.

Twelve states already have similar databases. New Hampshire’s website is considered one of the most comprehensive and user friendly. The site, at http://www.nhhealthcost.org, gets an average of 50,000 hits a month in a state with a population of about 1.3 million, said Tyler Brannen, a health care statistician for that state.

New Hampshire’s website gives the average cost paid for a service by insured and non-insured consumers at various facilities. It also provides information on health insurance for employers. If a consumer wants to determine how much various hospitals charge for having a baby, for example, the patient types in her ZIP code and the distance she is willing to travel. The database displays the names and phone numbers of medical facilities and their median charges for the procedures.

Brannen said the information is invaluable as patients increasingly face higher out-of-pocket costs, including higher deductibles and having to pay for procedures no longer covered by their insurance. Patients aren’t the only ones using the website.

“We have a range of users that are folks in the industry: health insurers, hospitals and physicians,” Brannen said.

The only group that has opposed the database in Colorado is the Independence Institute. Linda Gorman director of health care policy center at the Golden-based libertarian think tank, is concerned that patients’ identities will be compromised. The Colorado law specifically protects patients from being identified by name, but Gorman is dubious.

“[They say this is] a secure system, and the answer from the computer geeks is, there is no such thing,” Gorman said. “It gives the government a license to snoop in your most private medical information.”

“I was shocked the Independence Institute was the only organization that raised even a modicum of concern over the issue,” said the group’s director of operations Mike Krause.

State Sen. Morse, however, said patients will be identified only as numbers. “We worked hard to make sure that privacy is a bedrock in this process,” he said.

The start-up cost for the Colorado database is approximately $1.5 million, paid for by foundations, Kalin said. No tax dollars are being used. CIVHC was created via executive order by former Gov. Bill Ritter. It is comprised of consumer, business and health care advocates.

2 Comments

  • What does the price mean? Is it the inflated sticker price they charge uninsured patients and originally submit to insurance companies? Or is it the actual amount they generally get from insurance companies…not sure a simple list of prices means much.

  • @William: The All Payer Claims Database will show both prices – the “sticker price” as well as the negotiated amount insurance companies paid for the service.

    To report that price with precision, the All Payer Claims Database will compile claims paid by all insurance companies from across the state. Once the Web site launches, Coloradans will be able to see the price of a procedure across different locations, the approximate out-of-pocket cost (depending on their health plan’s deductible and coinsurance), and the quality of care received by patients at each of those locations.

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