Six things to remember when reporting on health care costs

By Lisa Aliferis, health editor/blogger, KQED; Rebecca Plevin, health reporter, SCPR; and Jeanne Pinder, founder and CEO, clearhealthcosts.com

Health care costs both lack transparency and are wildly variable, not just from region to region but sometimes from block to block within the same city.

That’s why our organizations – two California NPR affiliates (KQED in San Francisco and KPCC in Los Angeles) and ClearHealthCosts.com – are collaborating. We want to shed light on the murkiness of health care costs. The project is funded by the John S. and James L. Knight Foundation’s Prototype Fund.

Our joint project, PriceCheck, has two main features. First, we designed an interactive tool to make it easy (OK, as easy as we can) for people to share what they’ve paid for common procedures. Second, we’re creating a database so that people can look up costs of common procedures.

We solicit and share three key pieces of information: the charged price, what insurers paid and what you paid (if anything). The charged price, also called the chargemaster price, has little bearing in any kind of reality. It’s like the sticker price. Few people pay it, except for some of the uninsured. Think of it as a notional, aspirational or wildly inflated price that someone dreamed up.

What providers are paid is determined either by administrative rules set by government payers like Medicare and Medicaid – or by contracts between insurers and providers. Those negotiated rates, also called “contract” or “member” or “allowed” rates, are hidden by gag clauses in contracts between payer and provider. An insurer like Blue Cross doesn’t want Hospital A, which is getting paid $200, to know that Hospital B is getting $400 and Hospital C $1,200. Higher payments go to providers with more power in the marketplace, more prestige, monopoly-like market situations, and the like. In PriceCheck we are starting to reveal these hidden rates.

What are the essential things to remember when reporting on costs?

1. 
   Lisa Aliferis

   
   Rebecca Plevin

   
   Jeanne Pinder

   Expect wild variation. It’s not surprising to find a 10-fold difference in prices in the same city.

2. Do not expect cost to correlate with quality. It doesn’t. Remind your audience that paying the most does not mean you are getting the best care. It could be quite the opposite. For some people asking about prices is counter-intuitive, but for others, it’s becoming revolutionary. We’re encouraging people to inquire about the cost of care, and what they’ll get for their money.
3. Watch out for nontransparent transparency. Just because the numbers are public doesn’t mean they’re meaningful. Case in point: Chargemaster prices are allegedly public in California. But only academics can make sense of them. They’re not searchable in any meaningful way by consumers. And as explained above, the Chargemaster rate has little or no bearing on what a provider is actually paid.
4. Put numbers in context. Is it the charged price? The insured price? A cash price? If it’s the Chargemaster price, remember the caveat that almost no one is paying that price. If it’s the Medicare rate, is it what Medicare is charged or what Medicare pays?
5. People want to talk about this. Health price literacy is in its infancy, and consumers are getting very upset. In the words of a reader comment: “how’s a civilian supposed to make any sense of this?” People are starting to grasp that health care prices are not regulated and that there really is no functioning market. They are demanding more information. Help them out!
6. Visualize, please. It’s much easier for people to process information if they can visualize, personalize and interact with data. Our PriceCheck widget lets people interact with the data, and personalize it. When ClearHealthCosts and WNYC piloted this project recently, they created some other interactives. We plan a few of those coming up, so stay tuned!

The lack of transparency makes corralling health care costs both on a national level and on the family level virtually impossible. If you don’t know what you’re paying, how do you have leverage as a consumer – either as an individual or as an employer, purchasing health care on behalf of employees?

Personalizing this information, and breaking it down into small, digestible pieces, makes the discussion much more relevant to our communities.

Listen to their voices, in this blog post and throughout our coverage:

“Thank you for doing this!! Something I have wanted for years.”

“Each August I have a mammogram. Each September I get a refusal to pay from Anthem Blue Cross saying they need additional information. “

“My daughter will need this MRI again next year and thanks to your organization and what I learned on NPR, I will shop around next year and maybe just pay cash.”

“How’s a civilian supposed to make any sense of this?”

So, a final thought: Put a human face on these dollar figures. Talk to people who have felt burned by the cost of a medical procedure, or confused by a huge bill. Give those people something they can use to erase the sense of powerlessness.

If you’re anything like us, the sense of frustration you’re likely to hear will galvanize your reporting, and inspire you to dig deeper into this issue.