Open Data Drives Transparency
By Ken Congdon
On May 8, 2013, Health and Human Services released a list of what all hospitals in the United States charged for the 100 most common inpatient services in 2011. Historically, this “chargemaster” data was shrouded in secrecy by healthcare institutions. Exposing this information finally provides the public with a glimpse of just how inconsistent (and seemingly irrational) hospital charges are.
Steven Brill’s powerful Time article “Bitter Pill: Why Medical Bills Are Killing Us,” placed crosshairs on healthcare cost ambiguity and how this unknown denominator destroys patient lives. However, Brill’s article made its point by highlighting the medical bills of seven sample families. Surely, these seven families could have been extreme cases or outliers to the norm. However, the public release of chargemaster data proved that outlandish healthcare charges are the norm.
The data reveals a vast disparity between what different hospitals charge for the same procedures. Even facilities within the same geographic region reported wildly different prices for certain services. For example, as reported in the Washington Post, Las Colinas Medical Center outside of Dallas billed Medicare an average of $160,832 for lower joint replacements, while Baylor Medical Center (a facility five miles away on the same street) billed an average of $42,632 for the same procedures. The chargemaster data is rife with these types of discrepancies.
Some hospital leaders have already proclaimed that this chargemaster data is clouded because most consumers rarely pay these rates. Moreover, they’ve argued that no correlation currently exists between these prices and the quality of care provided at different hospitals for certain treatments. This is true, but I feel these individuals aren’t fully appreciating the significance of this fact.
First, by making this data open to the public, patients now have a baseline for what hospitals charge for specific procedures (regardless of whether it’s what most actually pay or not). Furthermore, patients can now demand that hospitals explain and defend their pricing. This finally provides a starting point to comparison shop for healthcare. Second, hopefully through Meaningful Use and Reform, hospital performance data on specific treatments will also soon be public knowledge. When this information is combined with chargemaster data, patients will not only be more informed healthcare consumers, but also will drive hospitals to charge for services in a more competitive manner.