The Priceline of Medical Procedures: Bringing Transparency to Healthcare Costs - TheStreet

NEW YORK (MainStreet) — The cost of modern healthcare in America is baffling and exorbitant. Prices are the result of a hidden collusion between insurers and providers; the consumer has little recourse in determining the accuracy or equity of charges – much less the ability to gain enough information to make an informed purchase. But one consumer group in California is trying to change that.

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PriceCheck, a crowdsourced database of healthcare costs, launched earlier this year through the efforts of two California public broadcasting stations and ClearHealthCosts.com. By soliciting information from listeners, the group has gathered hundreds of real-life charges for common medical tests and procedures into a free, searchable database.


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"KQED and DPPC conducted on-air announcements to encourage members of our public radio audiences to share their price data for four specific procedures: screening mammograms, lower-back resonance imaging (MRI) intrauterine devices (IUDS) and diabetes test strips," writes Lisa Aliferis in the Journal of the American Medical Association's Internal Medicine. Aliferis was part of the team that launched the project.

"Because there was no database where consumers could easily look up costs, we created one," Aliferis adds. "These are not 'chargemaster' prices from physician or hospital billing systems because virtually no one pays those. These are not 'average' prices either. You do not use 'average price' to shop for a car or a computer – you want the real price. Instead, we asked members of our public media audience in California to share, anonymously, what they and their insurers actually paid."

The database compiles prices from various patient scenarios, including from those who don't have insurance and pay all of the costs themselves, to people who have insurance and are responsible for a copay, as well as what the insurer paid.

However, healthcare is a bit different from shopping for a car or computer. The quality of care is a critical factor in making a "consumer purchase."

"In other sectors of the economy, people often equate higher cost with higher quality, but in health care it is widely accepted that there is no correlation between the two," Aliferis writes.

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The information gathered has certainly been enlightening. Aliferis reports that some patients receiving screening mammograms where charged a copay, contrary to the benefits mandated under the Affordable Care Act. Insurer payments for the common procedure varied widely, as well: from $128 to $694. Broad disparities also existed in the amounts paid by consumers and insurers for other identical procedures -- often while receiving care from the same facility.

"The window is cracked open on health cost transparency," Aliferis says. "We have been here before – with car sales, with airline tickets. Now, technology in combination with transparency can do the same for health care."

--Hal M. Bundrick is a Certified Financial Planner and contributor to MainStreet. Follow him on Twitter: @HalMBundrick

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