Post the Price

Hospital price transparency could save patients thousands

This report shows how price transparency can help patients find lower-priced care. It also reveals some challenges with compliance and makes recommendations to improve patients' ability to find the price of their health care services.

DCStudio | Adobe Stock
Maribeth Guarino

Former High Value Health Care, Advocate, U.S. PIRG Education Fund

Tanion Misawa Yee

Health Care Intern

For decades, people have walked into hospitals and accepted the care that the doctors recommend without knowing the cost in advance. As health care prices rise, it is more important than ever for patients to know what they’ll owe before they schedule their care.

We’ve made some headway on policies to help patients and researchers find hospital prices. Since January 2021, federal rules from the Centers for Medicare and Medicaid Services (CMS) on health care price transparency require hospitals to make their prices public in two ways: 1) in a machine-readable file that is useful for researchers and academics, and 2) in a “consumer-friendly” format – either a “shoppable services” list or price estimator.

We decided to investigate how price transparency rules are playing out using only the consumer-friendly tools, the information patients will find useful when looking for prices. This report shows how price transparency can help patients find lower-priced care. It also reveals some challenges with how hospitals comply with price transparency requirements and makes recommendations on how to improve the accuracy of patient price estimators.

Below is a high level summary of the report. You can download and read the full report with the link on the left side of this page.

We looked for the price of knee surgery

Between February and April 2024, our researchers looked for prices for a total knee arthroplasty, better known as total knee replacement surgery. This common, minimally invasive procedure is performed almost 850,000 times each year in the U.S., and is one of the procedures for which hospitals should post a price. We searched for prices using both the surgery name and the specific billing code for this procedure (CPT code 27447), which identifies the service being provided as a total knee arthroplasty.

We looked for prices at 27 hospital locations in the Cleveland metro area. We were able to find prices for the selected surgery at 20 of those hospitals.

Finding hospital prices presented some challenges

Some hospitals had missing information.

We found missing price information at some locations in the Cleveland Clinic system. We contacted Cleveland Clinic to ask whether they offered the surgery. Only one hospital within the system did not (South Pointe). Of the 10 locations that did offer the surgery, six indicated on the price estimator that it was unable to provide a price. At least at the time of our search, the missing prices make these locations out of compliance with the federal rule.

Some prices offered in the price estimators didn’t include the surgeon’s charges.

Most of the price estimators provided both the hospital price (fees that cover the facility costs) and the physician price (fees that cover the surgeon performing the procedure). The University Hospitals system was the only system which failed to provide both charges. Although their price estimator states that “additional physician charges may be incurred,” the hospital did not give an indication as to how the patient could find a surgeon’s price (see the screenshots below to view an example of these differences).

Physician charges for total knee replacement ranged from $3,756 to $10,231 in this study of Cleveland area hospitals. These charges are significant and could change the total cost of the procedure in a way that is significant to patients looking for lower prices.

Screenshot of price estimator at Cleveland Clinic Main. The Cleveland Clinic price estimator includes physician charges, as seen highlighted in yellow in the above image. Screenshots taken between February-April 2024. TPIN | TPIN
Screenshot of price estimator at University Hospitals UH Parma Medical Center. University Hospitals’ price estimates specify that “Additional physician charges may be incurred,” as highlighted in yellow in the above image. Screenshots taken between February-April 2024. TPIN | TPIN
Some transparency pages offered unclear information.

Lastly, some hospital systems were unclear as to which locations their prices applied. For instance, the Summa Health and MetroHealth systems only had one price listed, despite each system having multiple hospital locations. We called to clarify, and were informed that the same price applied to all of their locations.

Comparing prices at Cleveland hospitals had mixed results

We found wide variation in the available Cleveland hospital prices for knee surgery.

We found a wide range of prices for total knee replacement for hospitals in the Cleveland area (see the chart below). 

Self-pay price: The lowest self-pay price was $26,324 at MetroHealth and the highest was $242,121 at the two SummaHealth locations. 

Insured price: The insured prices were much lower than the self-pay prices. This is most likely because the selected health plan’s deductible and out-of-pocket maximum cap the charges to the patient. The insured price ranged from $5,900 at SummaHealth and Cleveland Clinic locations to $9,100 at MetroHealth and University Hospital locations.

The price of a total knee replacement varied by thousands of dollars in the Cleveland area, with a more than $200,000 difference between the highest and lowest self-pay price. Even for insured people who have the selected health plan, the prices differed by more than $3,000.

TPIN | TPIN
Range in available prices for total knee replacement. This graph indicates the highest and lowest self-pay and insured prices within each hospital system we reviewed in the Cleveland area. Note that the prices for University Hospitals do not include physician costs. All prices found between February-April 2024.
Prices varied even within a hospital system.

There was also significant price variability within hospital systems for self-paying patients. For example, there is a price difference of over $9,000 for this procedure for self-pay patients between the Cleveland Clinic system locations that posted a price (see the chart below).

Similarly, each location in the University Hospitals system had a different self-pay price (note: none of which included the physician costs). University Hospitals Lake West Medical Center had the lowest self-pay price within the system at $38,867.65. The highest self-pay price within the same system was nearly double: $75,593.53 at UH Portage Medical Center. 

When we compared the insured price within any of the four hospital systems, there was no variation.

TPIN | TPIN
Variation in price for Cleveland Clinic locations for which we found a price. The Cleveland Clinic system offered prices on their price estimator for total knee replacement surgeries at only 4 of the 10 locations that offered the surgery. Above are the available self-pay prices and insured prices for this system. All prices found between February-April 2024.
When done right, hospital price transparency can help patients.

When prices are easy to find and information is complete, hospital price transparency can arm patients with information that could save them thousands of dollars. The federal hospital price transparency rules require prices to be posted and available for patients online. This study shows that Cleveland-area hospitals are not fully complying with consumer-friendly requirements for price transparency in a variety of ways:

  • We had to call to clarify whether the procedure was offered and whether physician prices were included
  • Prices were not available for several Cleveland Clinic hospital locations that offer the procedure
  • Price estimates do not match prices available through hospital machine-readable files.

Despite these difficulties, our investigation into total knee replacement prices in the Cleveland area shows that shopping around could help people find lower prices, especially for self-pay patients. The over $200,000 difference between the highest and lowest self-pay price in Cleveland for total knee replacement is significant. Patients might be willing to travel a little farther for the procedure if they can get a lower price, as long as those prices are accurate. Even if you want to be seen by a certain provider or hospital system, price shopping within a hospital system can save money. Indeed, there was a $9,000 difference among four of the Cleveland Clinic locations. Insured patients also have the potential to save money, as seen by the more than $3,000 price difference found for the selected health plan in this study. 

Price transparency is part of a patient’s toolbox to know the cost of their care.

Hospitals frequently disclaim the price information provided as estimates only. However, insurers are required to provide similar pricing information with their own transparency rules. Under the No Surprises Act, self-pay patients have the right to a good faith estimate. If the final bill is more than $400 over the estimate, patients can dispute that charge. 

Although it is not currently in effect, insured patients are also supposed to be able to access estimates through their insurer by way of an “advanced explanation of benefits” (AEOBs). When enforced, insurers will have to send AEOBs to patients giving them a reliable estimate based on their health plan benefits and spending. This is an easier way for patients to know prices of their scheduled care. They would not have to search websites or know billing codes to get the price. 

Public prices from hospitals is a good step toward helping patients search for and find lower prices. To be truly useful, hospitals must come into full compliance and provide real prices for patients. PIRG will continue to investigate price transparency tools across the country and to push for clear, justified health care pricing.

Next steps for price transparency

Patients deserve the chance to make an informed financial decision when it comes to their medical care. Price transparency in our hospitals is important, yet there is clearly room for improvement. 

  1. We need strong monitoring and enforcement from the federal government to ensure hospitals fully comply with price transparency requirements. Every hospital should have a working estimator tool. And every hospital should show every price.
  2. We need accurate, dollars and cents, reliable prices from hospitals. Patients should be able to rely on the prices they get from “consumer-friendly” price transparency tools.
  3. We also need prices from all of our health care settings, not just from hospitals. We need prices for services offered at surgical centers, laboratories, imaging centers, birthing centers, urgent care and more. Patients deserve upfront prices wherever they get their care.
Topics
Authors

Maribeth Guarino

Former High Value Health Care, Advocate, U.S. PIRG Education Fund

Tanion Misawa Yee

Health Care Intern

Tanion is a rising senior at Ohio State University, pursuing a degree in Public Health.

Find Out More