Hospitals 1, Patients 0

by James C. Sherlock

Since January 1 of this year, after a court battle won in late December 2020 by the Trump Justice Department, the Centers for Medicare/Medicaid Services (CMS) has required hospitals to post median payer-specific negotiated rates.

I figured the fix was in when most hospitals in Virginia still haven’t complied. The Virginia Department of Health’s data contractor could have done it for all of them with data it already collects.

Sure enough, on April 27, the Biden administration’s CMS proposed repealing the transparency requirement. The elimination of this rule will be the latest casualty of the political power of the hospitals, especially with Democratic politicians.

Price transparency is wildly unpopular with hospitals because it exposes their huge rate differentials for the same procedure in the same hospital by the same medical team depending upon who is paying. These internal prices often vary by a factor of three.

Armed with that information, consumers can not only negotiate prices with their nearest hospital and shop prices among hospitals, but also compare them to other competitors like ambulatory surgical centers and independent medical imagery and testing centers.

These data are particularly useful to insurance brokers in serving their clients, businesses shopping for both insurance and providers and insurers negotiating rates. For insured patients, lower payments to hospitals mean stabilized or lower premiums and lower co-pays.

It won’t be the last hospital-friendly/patients-be damned-rule change coming out of the Biden Department of Health and Human Services. (They will be matched by the teachers-union friendly/students and parents be damned rules out of the Biden Department of Education.)

The hospitals and the politicians they dominate, most but not all of whom are Democrats:

  1. either hope the people who are disadvantaged — the rest of us — won’t notice; or
  2. they don’t care if we notice, because they think few will understand the costs to consumers; or
  3. they have political or health care monopolies in their districts; or
  4. all three.

I pick choice 4.