Hospitals now must post their prices online. Here’s what those menus won’t tell you

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Ever wanted to know what hospitals charge for that open heart surgery or to keep a loved one on life support?

Hospitals are offering some insight into those costs. Starting Jan. 1, all hospitals were required to publish online what they charge for the medical procedures and other services they provide.

The rule is aimed at making the cost of health care more transparent, President Trump’s health secretary has said. But the information isn’t easy to access or interpret, and does not show consumers what health care really costs them, experts say.

“This is not actionable data for the public,” said Schipp Ames, spokesperson for the S.C. Hospital Association. “It gives you some idea of the costs. It might take away some sticker shock.”

The price lists, downloadable in massive spreadsheets that include sometimes tens of thousands of rows of data, are each hospital’s internal charge sheet, Ames said. The charge descriptions use medical language and are developed by each hospital for internal use, making it difficult to match descriptions and to compare costs across hospitals.

Hospitals chose the spreadsheet format to meet the federal requirement of being “machine-readable,” meaning in a format that could be loaded into a computer database program for analysis.

The price lists fall short of being useful in one other big way, experts say.

“Other than a poor, unfortunate, completely uninsured soul who winds up on the steps of one of these medical providers, nobody actually pays these prices,” said Robert Hartwig, a health insurance expert at the University of South Carolina’s Darla Moore School of Business.

The charges that hospitals are posting online reflect their higher sticker prices for services, not what hospitals eventually get paid after negotiating fees with insurance companies, Hartwig said. Leaving consumers even more in the dark, the prices insurers negotiate with providers is secret.

Consumers get some insight into those costs, and how much gets passed on to them, after they’ve been treated and receive a bill for what they owe, Hartwig said.

“Health insurance is the most expensive thing that you pay for and have no idea what the cost is,” Hartwig said.

Comparing two major Midlands hospitals shows just how disparate the data is. For example:

Lexington Medical Center reported 23,393 procedures. Palmetto Health Richland reported 62,904.

The most expensive procedures at Lexington Medical are $524,945 for life support and $343,380 for a major heart surgery.

At Palmetto Health, the most costly procedure is what appears to be a type of heart surgery at $187,225. Meanwhile, a radical nephrectomy — the removal of the entire kidney, according to the Cleveland Clinic — costs $17, a price that seems highly unlikely.

Asked to clarify, a spokesperson with Palmetto Health said there wasn’t a more detailed explanation of procedures available.

Real progress in making health care costs transparent would be sharing with consumers details about the financial agreements between insurance companies and health care providers, Hartwig said, adding consumers then would have a better idea of whether they’re getting a good deal.

That transparency could help consumers and create more competition and lower costs, said Lynn Bailey, a Columbia-based health economist.

“Markets only work when buyers and sellers have information about each other,” Bailey said. “Health care is not a market and will not ever be a market because of information asymmetry, which means one side or the other has cornered the information.”