California (and Just About Every State) Gets an “F” in Health Care Transparency

Tuesday, July 28, 2015

Mother Jones blogger Kevin Drum wonders if, besides health care, “Is there any other significant area of life where it's virtually impossible to find out how much something will cost before you decide to buy it?”

Drum was prompted to ask that question by the 3rd annual “Report Card on State Price Transparency Laws” (pdf) that gave 45 of the 50 states an “F” for their efforts on health care. California was among the failed states. New Hampshire was the only “A”; Colorado and Maine received a “B”; and Vermont and Virginia earned a “C”.

The results were so discouraging for the authors that they scaled back the scope of the report. “You will find little progress since last year and, in some cases, regression,” they warned in the intro. “For this reason, this year’s report is concise, sharing information only on the handful of states that received new grades.”

One of that handful, New Hampshire, has bounced up and down. The site received an “A” the first year, in 2013, but dropped to an “F” in 2014 when the state disabled its website for health care price information. New Hampshire rocketed back to the top this year after debuting its new website, NH Health Cost.

The report deemed it a “prime example of price transparency.” The site has its limits, but users “can compare prices from health care providers throughout the state on more than two dozen medical procedures, including MRIs, CT scans, ultrasounds, and X-rays.”

Availability of information on a website is one-third of a state’s grade. The other two-thirds involve a complex review of laws and regulations that states pass facilitating and compelling transparency of health pricing information. The report also analyzes how effectively the laws are applied.

The report has changed a lot since its introduction. The authors, Catalyst for Payment Reform and Health Care Incentives, graded on a curve the first year (pdf), before realizing the error of their ways. California made use of grade inflation that year to achieve a “D”, while 29 states received an “F”.

The report card is one of a number of efforts to highlight the spectacle of people forced into a health care marketplace without any information on quality and price. The results are predictable. A study (pdf) in January by the BlueCross BlueShield Association of hip and knee replacements in 64 health care markets across the country found gaping price differentials.

Only the Boston area had a wider disparity in pricing for hip replacement surgery than the L.A.–Long Beach area. L.A.’s differential was 169%, followed in California by San Diego (100%), Orange County (46%), Riverside-San Bernardino (23%) and Fresno (8%).

“The phenomenon of extreme price variation in healthcare can have obvious financial consequences for individuals and employers,” the study said, and “serious implications for the sustainability of a U.S. healthcare system.”

–Ken Broder


To Learn More:

California Gets an "F" on Health Care Price Transparency (by Chris Rauber, San Francisco Business Times)

The Payment Reform Landscape: States Show Little Progress in Past Year (by Suzanne Delbanco, Health Affairs)

California Fails at Giving Patients Actual Medical Prices, Report Shows (by Whip Villarreal, Los Angeles Times)

Surgical Costs Are a Known Unknown with Wide Variation Across the State (by Ken Broder, AllGov California)

Report Card on State Price Transparency Laws (Catalyst for Payment Reform–Healthcare Incentives Improvement Institute) (pdf)

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