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Increased Cost Transparency on the Horizon

A little survey study in the Journal of the American College of Radiology looked at the price transparency of CT scan. Aaron B. Paul, MD; Rahmi Oklu, MD, PhD; Sanjay Saini, MD; and Anand M. Prabhakar, MD, called 32 prominent academic centers and large private practices looking for the cash price of a noncontrast head CT. In the resulting paper, “How Much Is That Head CT? Price Transparency and Variability in Radiology,” they reported that 78% of the imaging facilities they called provided the answer. When academic facilities were queried, the results were almost identical. While a study of 32 phone calls is not the definitive work on price transparency, it suggests that the large academic hospitals and private practices are paying attention to its importance.

Efforts to rein in health care costs and government health care spending—they are not always the same—are raising out-of-pocket deductibles and copays for patients. Those patients are increasingly shopping like retail consumers. Add in the Internet age’s growing expectation for immediate answers and my conclusion is that the 22% of facilities who can’t pull that information together better get busy figuring out how they’ll do it in this era of consumer health care.

The large private practices in the survey were pulled from the Radiology Business Journal list of the largest 100 radiology practices. You can bet those practices understand their data and the markets they operate in. Health care organizations that figure out how to blend the patient aspects of medicine with the consumer aspects of medicine are more likely to thrive going forward.

“Prices for a noncontrast head CT study were readily available from the vast majority of upper-tier academic hospitals and private practices, although there was tremendous variation in the price estimates both within and between the upper-tier academic hospitals and private practices,” the authors wrote in their conclusion. “Routine medical imaging thus appears to be more price transparent compared with other health care services.”

That said, one possible problem with transparency is what you might see. The same survey found the cash price for the CT scan. The price of the scan ranged between $392 and $2,015 in the academic hospitals (the average was $1,390). In the private practices the range was $211 to $2,200 (the average was $682). I understand that there are reasons for price differences and that cash prices and insurance reimbursement are very different, but health care providers are increasingly facing pressure to tell patients/customers the out-of-pocket cost of medical services. The veil is slowly dropping from health care pricing and providers will increasingly need to decide how they’ll handle more transparency. Providers understandably worry about “race to the bottom” pricing in health care, but there’s more to the issue and facilities looking to the future should think about it that way.

— Jim Knaub is editor of Radiology Today.