Healthcare Pricing Transparency, Top-Down

Posted on August 26, 2013


Becker’s Review reported today that North Carolina Governor Pat McCrory has signed legislation requiring all hospitals and ambulatory surgery centers (ASCs) to submit common procedure pricing to the State.  140 common procedures will be monitored, with rates sent to the NC Dept. of Health and Human Services (DHHS) quarterly beginning in 2014.

NC is not the first state to require this, but it is an early top-down adopter (required action from the state government), and definitely fast-forwarding the amount of data available for patient-consumers to use when shopping for medical procedures—“when” being the operative word, in our new post-Reform healthcare realm.  Retail healthcare and consumer-choice are two fundamental tenets of post-Reform healthcare believed to help reign in pricing.

Hospital grades and Leapfrog safety reports are becoming easier to access.  The triumvirate of patient-consumer power lies in data, data for:  institution (quality, safety, rankings), physician (quality, history) and pricing (total costs, per procedure).

Some of this data is important because it is standard and quantitative—measurable and comparable between hospitals and physicians.  The balance is important because it is qualitative—subjective from others’ experiences.

Interestingly, the article mentions this legislation grew roots from several local newspaper reports on inconsistent healthcare pricing between hospitals and areas.  I am a little skeptical.  Exposes of this sort have been going on for some time, in most states, and few Governors are acting as quickly and as decisively as North Carolina (and Arizona recently) have.  In fact, when presented with more than a smoking gun—as in the case of Medicare and Medicaid fraud—federal officials have done little to investigate, legislate, or indict.  With so many powerful lobbies at work behind the scenes, I am sure it takes more than a 20/20-style sting operation to initiate state-wide mandates from the courts.

Nevertheless, this is major progress.  Not long ago, patient-consumers were told (indirectly by their insurers) they would need to become more savvy shoppers of their healthcare services; yet, they lacked the tools.  Waiting for bottom-up (individual / private company-driven efforts) reform was not going to be a fruitful exercise.

If every state follows the efforts of Arizona and North Carolina, a giant step of empowerment for the patient-consumer is imminent.