New Year Brings Price Transparency For Common Medical Procedures

December 13, 2013

Come New Year’s Day, Arizonans could have a better sense of what it costs to see the doctor. Earlier this year, state lawmakers approved a measure requiring many hospitals and physician practices to make available lists of how much their most common procedures cost for patients who pay out of pocket.

"We’re not selling things you buy at a shopping mall," said Greg Vigdor, president and CEO of the Arizona Hospital and Healthcare Association.

He said price transparency is a good thing, and that there is really no defense for how confusing it can be to buy health insurance. Vigdor said the information could be useful but probably not to that many people.

"The extent that we’re able to provide information for those people who are gonna be out there and actually buying at retail and they are the minority, then this might give them a little more confidence, in terms of getting to the facility they need that’s gonna be best for them from a cost standpoint, but again, I think there’s gonna be limited benefit from that, in terms of the number of people," said Vigdor.

That is due, in part, to the fact that the prices will generally only apply to the nearly 1 million Arizonans who do not have health insurance or those who do but do not use it, and Vigdor said that first number will likely go down, as those people sign up either in the health insurance marketplace or for Medicaid.

Larry Levey is the executive director of Arizona Community Physicians, a physician-owned group in Tucson focusing mainly on primary care.

"Most of the compensation is insurance-based, and there’s specific amounts that the insurance companies are gonna pay, regardless of if you charge $100 or $1000. It doesn’t matter," said Levey.

Levey said the information is not going to benefit that many of his practice’s patients. He calls it useless. Supporters have touted the law as a way to let patients comparison shop and look for the best deal on their care, but Levey does not think that many will do so. He uses the example of a patient who wants a physical.

"You call up Doctor A, and he says a physical costs this much, and then you call up Doctor B, and he says a physical costs this much, a different amount," said Levey. "And so, here you are, maybe you’re trying to shop off of an individual physical, but it doesn’t indicate what other peripheral costs you’re gonna have for the testing that goes with the physical."

Levey said it was easy for his practice to come up with its price list. Vigdor expects all of his members to be ready with theirs at the end of the month, but he agrees with Levey that they probably will not get a lot of use.

"When people are sick, usually what you're trying to figure out is where can I get the best care that I need, and the pricing considerations have really been secondary," said Vigdor.

Vigdor believes the law is, in many ways, symbolic, but he said that symbolism is important, especially if it leads to a more understandable pricing system for patients.