Asking Price: Munson’s posted healthcare prices appear moot

Since Jan. 1, 2019, hospitals across the United States have been legally required to post prices online for all the procedures and services they provide. The change was intended to make it easier for customers to see prices ahead of time and to compare them against what might be available from other healthcare institutions – essentially bringing hospitals closer in line with other types of free market businesses.

More than two years into the mandate the feeling within Munson Healthcare is that listing pricing information in this fashion adds to the administrative bloat of the organization without creating significant benefits for most patients.

According to Dianne Michalek, chief marketing and communications officer for Munson Healthcare, the Munson Medical Center (MMC) “chargemaster” – the term used in the medical industry for hospital price guides – “receives a relatively low amount traffic.”

While Michalek notes that the chargemaster page has seen a slight uptick in web visitors lately, thanks to “the launch of a new web application for hospital pricing,” it is not and has never been a core tool for most hospital patients.

Two big hurdles to widespread adoption are scope and complexity. Michalek tells the Business News that the MMC chargemaster alone “includes well over 9,000 items.” There are 185 pages of services and procedures, with each entry providing a code, a description and a charge amount. If a patient knows what they are looking for, they can use a search function provided with the page.

Even after finding the correct (or potentially correct) service, there is still confusion awaiting patients. Many items have the same description but different codes and pricing, with no clear explanation for what makes them different. For instance, the services with the codes CCM-237100737 and CCM-237100739 bear an identical description of “CARDIOLOGY – REMOVAL OF BLOOD CLOT AND INJECTIONS TO DISSOLVE BLOOD CLOT FROM ARTERY OR ARTERIAL GRAFT,” but the former is priced at $7,906.20 and the latter is $6,823.50.

Making matters even more complicated is the fact that every hospital has its own chargemaster. With nine member hospitals, that means MMC has nine different chargemasters – all of which vary depending on what services or procedures are available at each institution. They also vary in how information is presented: at Munson Healthcare Manistee Hospital, for example, there are 19 services described simply as “CARDIOLOGY,” with eight-digit numerical codes that don’t match MMC’s letter-number coding format. The services range in price from $17.00 to $2,552.00.

Despite the minimal detail provided about each service in the chargemasters, Michalek says updating the databases is an arduous task. Each chargemaster is updated annually, “in alignment with (Centers for Medicare & Medicaid Services) regulations.” MMC’s chargemaster was most recently updated on December 23, 2020.

“The pricing data is pulled from a number of different information systems,” Michalek explained. “And with over 9,000 items within that index (for the MMC chargemaster), it takes a significant amount of time and resources across multiple departments to update and maintain.”

These types of issues have created a national debate about hospital pricing transparency and the Trump-era rule that requires hospitals to share their chargemaster prices online. Advocates of the policy point to the astronomical price of many healthcare services in the United States – as well as the massive degree to which those prices can vary from one hospital to the next – as an indicator that transparency is vital to protect consumers from exploitation at the hands of healthcare providers.

Hypothetically, by giving patients and their families access to this pricing information, the chargemaster rule can enable people to make the most economical decisions possible for their care.

Critics of the national fixation on chargemasters, meanwhile, note that the numbers provided as part of a hospital chargemaster are effectively meaningless. Every hospital sets its own chargemaster rates and can change those rates at any time – even if the public-facing online chargemaster is only updated annually.

Furthermore, given that most patients in the United States are represented by some form of payer – be it a commercial health insurance provider or a government program like Medicare or Medicaid – the prices listed on a chargemaster rarely bear any resemblance to what anyone pays for care. Insured patients don’t pay those prices because their insurance providers cover all or some of their bill. Insurance companies don’t pay those prices because they negotiate with hospitals to arrive at the rates they actually pay. Medicare and Medicaid don’t pay those prices because they have pre-set levels for what they will reimburse providers for different services, which have nothing to do with what’s in the chargemaster.

According to the National Academy for State Health Policy, the party most likely ever to pay a chargemaster price is actually an uninsured patient.

Michalek echoes many of these criticisms in her assessment of chargemaster dynamics.

“We strongly believe patients should have access to the information they need to make the best care decisions for themselves and their families,” she said. “However, a chargemaster is not a good tool to use in price-comparison shopping because each patient’s case and healthcare coverage is so unique. The price a patient sees on their hospital bill reflects not just the specific care team who treated them, but also overall operational costs that keep the hospital running 24 hours a day, 365 days a year. While chargemaster amounts reflect what a patient could potentially pay, those amounts are rarely, if ever, billed to a patient or received as payment by a hospital.”

Another concern among chargemaster critics is that the lofty pricing figures included in these databases – combined with minimal other detail or context – could potentially dissuade patients from seeking the care they need when they need it. However, because Munson’s chargemasters have typically seen so little web traffic in the past two-plus years, Michalek says there hasn’t been any issue locally with this type of outcome.

“We are not aware of anyone who has delayed or avoided care based on their review of this (chargemaster) information,” Michalek said. “As a non-profit healthcare system who employs financial counselors, patient advocates, and other resources, we most typically work directly with the patient and their health coverage provider to ensure they are getting the care they need and address questions about the cost of those services.”