Appreciate the complexity of billing codes, these are not created by hospitals but by by the American Medical Association, Center for Medicaid/Medicare and a soup of other organizations. There are tens of thousands of procedure and drug codes (things that are done or given) and tens of thousands of diagnostic codes (reasons justifying the procedure), creating a space well into the quadrillions of possible routine combinations. That's a large restaurant menu.
There are a number of other comments comparing hospital pricing to retail type interactions. It is also important to consider that hospital interactions involve unexpected and unknown things that aren't easily captured in a pricing context before you get there.
From an instution standpoint there are some bad apples but a lot of organizations that are not complying are not complying because they are facing technology and operational issues that are stopping them from complying. From the trenches in my consulting practice one example is an institution whose has a core element of their billing system, that is largely a black box even to them, using technologies that are decades old. Why would someone continue to rely on that? Because it has direct integration with critical partners and counterparties that was set up decades ago and that continues to work.
Replacing it is underway but is costing 8 figures and taking years. The potential fines are small relative to that and there isn't much they can do to comply in the immediate term anyway.
For context understand that Medicare billing routinely involved actual physical dial-up modems somewhere in the chain (even if it was invisible to you) until late 2018.
At the end of the day, people just want a "good enough" estimate of what a hospital visit will cost in the typical case for their reason for visiting the hospital. In the event there's variability, that's fine. Just surface that. Knowing several doctors who have seen what has actually been charged for their patients... the vast majority of procedures aren't going to have wild variability for most patients.
Let's look at one common issue that people face: they get charged $400 for a pill of ibuprofen or $2k for a bag of saline with no meds. Even exposing consumable prices is a step in the right direction.
I had some really bad intestinal pain and tons of vomiting a few months ago, bad enough I ended going to an ER because I was passing out.
Do you really expect they'd be able to tell me within a minute or two evaluation of me what everything they'd need to do, based solely on that knowledge?
Maybe all they'll end up doing is giving me some good anti-nausea meds and a saline drip. Maybe I'll need surgery in a half hour. How could they possibly give me a realistic up front estimate they could stick to?
Healthcare isn't a free market. When my family member was puking blood I wasn't shopping around, we just called 911.
My first child, I got an estimate for the cost. An extra day of labor past expectations and half a week under Billie lights in the NICU blew that estimate not just out of the water but out of this galaxy. Imagine if fixing a dented bumper took an estimate from $200 to $60k, and yet that's not uncommon in healthcare.
These attempts at pricing transparency seem like another way to put blame on the patient for making "poor choices" when really the system needs to be less complex for the patient. Let auditors & regulators handle pricing and gouging, ideally within a single-payer/public option system.
I recognize this is the reality. But it seems insane that they have not fixed this in decades and instead charge people based on a “black box.”
I’m sure the fact that they make more money this way has nothing to do with their inability to comply.
From my perspective, as a patient and taxpayer who funds these things through Medicare and Medicaid, I think those who are incompetent and shady are the same to me.
I’d almost rather have a health system try to cheat than so stupid they don’t know what’s happening. The company that cheats on billing seems more likely to be competent than the one who doesn’t know how to cost their care and hasn’t known for decades.
Indeed. This "complexity" hides so many obvious scams. Errr...well, rather, it sometimes hides these scams. For example, they billed my wife for an "ER Visit" when she gave birth. Even though the ER was in another building. (Well, except for a little sign that said "ER" over the door to the admitting room. We spent 5 minutes in that room, but it resulted in a multi thousand dollar bill.)
This happens regularly and intentionally.
Sure, there's the unexpected things that happen. But, the complexity of billing lets the experts (hospital administrators) deceptively game the system, and get away with it without any recourse. Enough things happen on a recurring basis that its shockingly easy for them to create "policies" about what to code and when to code -- policies explicitly designed to maximize revenue. (Even if they're stretching the truth.)
And there are absolutely zero consequences for this, which is why it will never stop. It’s not even negligence, it’s straight up fraud; and if you refuse to pay, your credit can be ruined, so in effect you’re being intimidated and coerced into just paying it “or else”. I sure wish I had the power to send someone a bill for non-existent goods or services and that it could be legally backed by governments and corporations.
*the third trip, like you, was passing through the OB ER on the way to delivery and I’d never count it normally… then again unlike you my total cost out of pocket was $5. The financial experience of childbirth has been one of the most useful tools in reframing my understanding of total comp as something very different than salary.
What conclusions might we draw from the fact e.g. a "Pharmacy Benefit Manager" is a job that exists only in the US [0]? Why does it feel like my insurance premiums pay for lots of things that are difficult to attribute to actual improved health outcomes?
Appreciate your insight.
[0] https://www.goerie.com/story/opinion/2021/06/12/op-ed-when-c...
Here’s a write up I did about the experience: https://blog.karlbecker.com/should-health-care-be-profitable
> I want income for health care companies. I want enough to make sure they are there when me and my loved ones need them. Every company, whether a non-profit or profit, needs income.
I'm curious about the assumption here: why is market-based income necessary for the existence of a health care institution (hospital, doctor's office, pharmacy, etc) ? These institutions exist just fine when they're socialized and nationalized: see... well, any other country on earth lol.
> And the people providing the extremely worthwhile service of healing people, and easing people’s pain, should be paid well.
Why the assumption that they can't be if the system is detached from profits entirely, such as if it's socialized or nationalized?
I think the quote by your cousin Adam is funny, but I think I disagree with his assessment. Similar arguments are made to counter subsidized or socialized food distribution, the "buying lobsters on food stamps" argument basically. It's kind of a funny argument because it's sort of victim blaming: for the first time in someone's life they can eat like the rich people they see in media, enjoy a high quality of food, and like a human can be expected to, they do it in excess, and that's somehow... bad. But also, it's just mostly untrue, and I think anybody can know this for themselves asking a simple question: would you REALLY eat steak every day? (the cousin claims yes?) Knowing what that would do to your health? Knowing you surely would bore of the meal? And shit, if our society can provide a sustainable system where people CAN eat steak every meal (or whatever "extravagant delicacy" you can dream up), isn't that a GOOD thing?
Can't we say the same of healthcare? If we can create a system where EVERYONE can get high quality healthcare at low or no costs, isn't it GOOD that everyone will thus get high quality healthcare? The counter argument may be "we can't create this system," but I saw, no, you definitely can, other countries have and are doing so, I live in Taiwan and high quality healthcare is extremely accessible to the entire population, and a national effort to increase outcomes and accessibility is underway. I like to say, if you've got money for fighter jets, you've got money for free healthcare.
Or is the idea that routine combinations are always used to justify the billing code with the highest possible revenue?
I was pretty pissed off when the local ER and traveling doctor used the CT scan I got to justify a more complicated case, when what happened is that the radiologist made a definitive diagnosis for $20 and basically eliminated any liability for sending me home with a prescription for antibiotics.
(a sinus infection irritated the nerves in one of my teeth and I became concerned about the degree of pain during the night on a weekend...not a particularly grave condition in the end, but easy enough to become concerned about pain radiating through your jaw)
He makes it easy to tell where he is coming from by using the straw man for all apologists for system failure, those pesky few bad apples.
Fortunately he also states clearly the main problem with a healthcare system run in a semi-corrupt, neoliberal developed country (think aging population):
>I've spent the bulk of my career as a CEO and senior executive operating large health systems.
Then there's the outright Medicare fraud of orthotics, braces, and all sorts of overpriced, shoddy paraphernalia that's mostly concerned with coding (billing) rather than patient comfort or wellbeing.
www.mcmaster.com has half a million products. Amazon has who the hell knows. Even factoring in combinations, sheer number alone should not make the problem any more complex than any inventory/product system.
It is logically complicated far and beyond ordering a book.
Understanding what is even needed for billing up-front isn’t possible in all cases. What happens when you have extra bleeding during a procedure and now need additional units of blood and associated equipment and care? How do you bill this in advance?
Then, we have “medically necessary” issues. Your insurance may cover an issue if it is medically necessary, but it often isn’t clear if it is or isn’t until game-day. Then what? Or, of course, the hospital and insurer may have different professionals engaged in a spirited debate over whether or not a given piece of academic literature supports or denies the necessity of a procedure. So there we have an issue that isn’t algorithmic at all (a human debate!)
Then we have all kinds of other fun issues, like the coding being a living document. The AMA regularly “refactors” coding as the medical world evolves. What was billed yesterday as one code may become two or three different items each with their own conditions applied. Except the old code is still supported as well so now someone has to go back and sus out the discrepancy between the ordering provider and the insurance payer.
So, for very rote procedures it actually is easy to give flat rates and solid estimates. I have a local Doc-in-a-Box facility that offers a flat-rate $90 service for a standard visit which even includes things like x-rays and steroid shots. When I went in with a stomach bug and needed some add-ons it was a simple piece-sheet line item as you wish.
BUT! The world isn’t this simple, medicine is a very complex practice, and so we can’t simply estimate a price out-of-the-gate.
As an exercise, think to yourself - my friend walked up and asked me to make his awesome Facebook-for-Cats app. Well, please provide me an exact billing of what you will need in terms of time and cost. If you’re now thinking “well shoot, what features does he need?” You’ve now founded yourself in a bounded-but-open question. These also happen in medicine and are why “just give me the number” isn’t easy.
10^5 * 10^5 = 10^10 which is tens of billions, not quadrillions
That said, a combinatorial space can be simply represented as a tuple of two columns (10^5, 10^5) instead of having to map every possible (including nonsensical) permutation.
Increase for three or four dimensions.
My employer offered this plan during open enrollment this year and I’ve decided to give it a try after a few years of getting burned on our HDHP with HSA.
I would expect the majority to continue with the current system, but it surprises me that (if it's not about money but rather is about complexity) there aren't doctors opting out.
The same reason all licensed <trade> in your area are about the same price for the same work.
They paid years of their life into a system that lets them bill exorbitantly. They're not gonna undercut it. And if they are they're only gonna do it enough to get enough volume to keep them busy, which isn't much.
And while most people think of going to a doctor's office - family medicine, internal medicine, pediatrics, or OB/GYN - as what doctors do, they're actually a minority of doctors, and OB/GYN's do a lot of their work in the hospital. Some of us - I'm an anesthesiologist, but also radiologists, pathologists, critical care doctors, and so forth - don't have a clinic at all. Nobody's going to pay me a monthly or yearly fee, and establishing a billing relationship that doesn't involve insurance would be a real nightmare.
It is a black box after all It is a black box after all …
This hell loop need to escape especially their patients.
I’m a former healthcare venture capitalist who left my role back in May to learn CS and tackle some of these problems from the trenches…where in particular would you recommend I focus my efforts given your years of experience?
There is this wealth of new pricing data but I haven't yet seen it employed in really practical ways that help patients day to day so I think there are some oppourtunities there. I think GoodRX has done a very good job in improving patients decision making around drugs as an example.
The other point I frequently make is maybe not to overshoot too far. There are a LOT of simple problems that need solving. I think I see a pitch about this or that "reimaging healthcare" every day. In practice there are huge and obvious problems in the basics of provider and patient communication. For people with serious illness making sure the patient knows and can get to the right place at the right time is very underserved.
I got a bill from the trauma center hospital for something like $500. Based on what I've been conditioned to expect from the U.S. health care system that seemed pretty reasonable. Then I got a bill from Northwell Health where I recieved no care for more than $800! Around that same time the NY Times came out with a piece about Northwell overcharging (https://www.nytimes.com/2021/03/30/upshot/covid-test-fees-le...). It took me months of badgering both my insurance company and Northwell to stop sending me payment delinquency notices.
Now, more than a year and a half later, they started sending me bills for that $800 again! So I'm very excited to see this kind of open source approach at this problem.
For a hospital, your care is not merely the interventional aspect of medicine, but also the vitals, diagnosis, charting, and time spent on reading your documentation by a medical professional with > 20,000 hours experience & training.
The front desk also had a menu of pricing options there for us to see - a rough cost of the entirety of the visit’s potential costs was glanceable right as you walked in the door. It was amazing, excellent, and I’ve never seen anything like it anywhere in the USA or Germany.
You can email me at du@50km.com .
In a world where you're not the primary payer.
The complexity of healthcare prices is an artifact of decades of negotiations between providers and insurers, with the added headaches of linked diagnosis and procedural dimensions.
IME the pricing is so overtly complex that transparency into it isn't going to make much of a difference, it's just going to create more questions. If you want simplicity, switch to single payer.
Medicine is one of the most well-documented, well-studied fields in human history. Every single thing a doctor does and charges for is stored and coded in an electronic system.
It blows my mind that my mechanic can give me an accurate estimate and they are legally bound to honor that estimate. However, my doctor can't even tell me how much my routine medications will cost.
When my wife had our first child, the hospital sent the placenta out for sampling without our permission. This "in network" hospital then billed us for an "out of network" expense on a decision they made without our consent. Same hospital also double charged us for anesthesia because they choose to have a CRNA and anesthesiologist in the room at the same time.
Thankfully, my wife works in healthcare so we called their BS. We suspect that this hospital is doing this to essentially birth.
Happy to see some movement on at least price transparency though.
Thus the ability to "shop around" and thus subjectivity of medical care to price competition definitely exists in the majority of cases. If the system were setup to incentivize and support this. But due to lack of price transparency and skin in the game, there is no competitive pressure on pricing in practice.
https://www.politifact.com/factchecks/2013/oct/28/nick-gille...
Are you saying the majority of patient-practitioner encounters are emergency visits, or that the majority of spending is on emergency care, or something else?
We should also acknowledge that it costs money to deliver and we live in a resource constrained world.
this happened to me when I was hospitalized for a heart palpitation that matched a side effect for medicine I was on as an emergency that, according to the medicine's documentation, warranted a 911 call. I turned out to be fine, yet my insurance company decided I owed a couple thousand bucks for the ordeal.
I was doubtful and so when I got the bill (3 months later and very unexpectedly), I simply started making calls to get someone to justify me why it was my responsibility to pay the bill and not the insurance company's. The hospital said the insurance company already paid some ungodly amount of money for my bill and the bill was... some made-up clown world insurance company term. Copay, or payable, or deductible, or co-insurance. How many new daft words do they have today? This was 2015.
Insurance company just didn't have clear answers. I read the policy, it was vague enough that I was arguing that the entire hospital visit should simply be 100% covered, I'm guessing the insurance company didn't have a way for their support staff to make the legal argument they'd have to make if I just straight up sued them for it. That's probably the only way to get a clear answer: sue, and get them to trot out a lawyer to say the justification to me.
I honestly was happy to pay what I truly owed, I just wanted to make sure I wasn't overpaying, that's all. But lo, I lost the paper bill, and asked the hospital to send it again in the mail. They did, 6 weeks later. The account number on it was different than what I wrote down. I asked them to check. They sent another one, 6 weeks later, correct account number, my name mispelled. This comedy continued until the bill was sent to collections, a year after the original bill. The collections agency couldn't provide proof of debt, and it was sold again, to a different one. This one also couldn't provide proof of debt. 3 years later I'd still get random calls from some new debt collector. The original hospital had shut down, and so nobody could provably connect the debt they had bought with my phone number on it, to the identity of the person that walked into the hospital. I mean, honestly at this point I'm not even sure if there was a genuine mistake in billing: there's literally no way to know now.
Regardless, I never paid the bill, and this remained my strategy for the miserable few remaining years I had to deal with the USA healthcare system: just make some phone calls and the bureaucracy will get so tangled up in itself it seems I could continually just slip through the cracks unscathed.
Before anyone asks, nope, the unpaid bills never showed up on my credit report.
No, they charge the insurance, but US healthcare providers are still required to show individuals the billing details.
This is important because people still pay for amounts up to their deductible and out of pocket maximum, so for non emergency healthcare, a patient still has incentive to compare healthcare prices from different providers.
In many world states, if you have health insurance, and are referred to hospitalization, or come in with a wound or other obviously serious condition, your deductible/out-of-pocket for being in the hospital is exactly 0. Israel is in this category for example. This doesn't cover 100% of hospitals but all the big ones and your "sick fund"'s hospital-grade facilities.
In other countries (e.g. the Netherlands), a lot of health care expenses are charged through to you from the get-go, but - your annual out-of-pocket maximum is low, e.g. 500 EUR or 700 EUR or something like that (EUR ~= 1.05 USD right now, was higher when I was in the Netherlands). So, you might be interested in what hospitals charge, but it's not like you would save all that much anyway.
Though most insured people don't really have options to shop around. You go to the few places your insurance covers, which is usually 30-60% of providers in a small geographic area. Which is why the "we want to protect your choice!" opposition to healthcare reform is so damn weird. Most people already have very little choice, in practice, and a lot of the "choice" we do have isn't anything desirable ("which of these shitty insurance plans I can barely understand and am not confident I can meaningfully compare, would I like to suffer through?").
Most insurers pay negotiated rates, which have no real relationship to list price (uninsured pricing). The law is supposed to (1) make it easier to compare costs, and (2) shame providers into lowering their list prices.
Obviously the industry has been fighting these regulations for years.
The annoying thing is al the games they're playing. Everyone already has a list of prices by CPT code, because it's what billing uses. Just list all prices by CPT codes. The industry refuses.
What about the hospitals? Are they mostly for-profit or non-profit entities?
- what insured persons pay until they reach their deductible (and how high that is depends on the insurance plan they have, cheaper plans have higher deductibles)
- uninsured persons
As an example, you get a bill for $100k for a one-night hospital visit for an emergency, but it gets knocked down to $15,000 at Medicare reimbursement rates, and then you only pay $1,000. Which price should be shown? It is any use to show the $100k figure?
Or am I missing something that has changed? I mean, I'm all for these efforts but if there is no consistency / meaning behind the numbers being used, it's no good.
The inflated price you're talking about is called the "gross price." It's a made-up price, or MSRP. Just publishing this price list isn't that helpful.
The price lists are supposed to contain the negotiated rates with different insurance companies or medicare. Those reflect the rates that your insurance company pays. You pay some fraction of that depending on your plan.
Most price lists don't contain this information, though.
The purpose of the article was to see how many of them contain the elements that are required from the transparency bill, the ones which allow meaningful price comparison between hospitals. And the answer is... not that many do.
But among the ones that do, you can kinda sorta make a meaningful comparison (but there are even caveats there as well.) Feel free to follow up if you have more questions.
This is the data gathering phase. When we're able to release a database of these hospital prices with high data quality I think it'll be a pretty big deal, just because it's so much work.
It's hard as hell because of how inconsistently formatted these price sheets are. We'll need to develop a robust ML tool to process all of them in a consistent way, or just put a lot of man hours in. That's something that One Fact is working on. DoltHub's main interest is in producing the source databases, which is just a lot of grind work.
We're crowd sourcing the data collection via a "data bounty." It's like a scavenger hunt where you get paid for the data you input. I designed the table and I'm who reviews the data going in, via pull requests.
Incidentally we do have a hospital price database here (the only open one of its kind) but with mixed data quality. https://www.dolthub.com/repositories/dolthub/hospital-price-...
Not sure what they mean by "bounty"
> This bounty will be run in 5 parts of 1 week each
Is this some sort of crowd-sourced effort? Like GasBuddy but for hospitals? Their GitHub also some "example" apps with React, Lit, and Next
https://github.com/onefact/payless.health/tree/main/examples
I guess I should try building one of these examples first
But, at the risk of seeming extra dumb: is there a way to contribute to this project for people who don't know how to work with SQL?
There are ways to import CSV or other flat files, either on the command line or on dolthub. You just need to make your file's schema match the table's.
One of the most frustrating things is that insurance companies seem to push for strategic bitrot, making it difficult to programmatically or frequently collect the information from a large group of payors.
Regarding your first point:
I'm aware of the copyright on billing codes. I suspect it means "you can't make your own billing codes based off of our system."
I don't think it means you can't republish the codes anywhere. They're republished all the time.
Someone can jump in and correct me.
Secondly:
The CMS law required hospitals to itemize their procedures by billing code _and_ by insurance company. Not that they all do that, but in theory, these negotiated rates should allow you to price shop between hospitals. The "list prices" are effectively meaningless.
> One Fact to feed these files into their artificial intelligence pipeline and figure out how much hospitals charge for different procedures
Here's an example NLP tool I helped build we're using to do this: https://arxiv.org/abs/1904.05342 -- it's in several pipelines now for data annotation and crowdsourcing.
Just my guess
[0] https://www.dolthub.com/repositories/onefact/paylesshealth/d...
I'm working on something similar, digitising my daughter's 213 pages of medical bills by building an app specifically for digitising printed medical bills. https://kingsley.sh/posts/2022/digitising-213-pages-of-medic...
Everyone kept saying "make sure to check your statements", but when the statements came, they're 9pt font, 50-70 line items per page. 1 page, yes, 10, maybe, 213 is impossible.
In the middle of working on it last week, I got a $3000 medical bill, for my daughter who passed away 1.5+ years ago, for part of her 7 month ICU stay 2+ years ago.
https://www.econtalk.org/keith-smith-on-free-market-health-c...
It’s like hospitals pretend to be idiots when other industries can estimate a median cost and price accordingly. And they have estimates good enough to be profitable.
Even barbers charge $30 for a haircut when some take 5 minutes and some take 30. If a barber didn’t post prices because it’s impossible to estimate how many minutes it takes to cut hair I wouldn’t use them unless my life depended on it.
In hospitals? The honest answer is they often don't know the true costs. They'll know the costs specific to a department, but the "shared" costs of the hospital, staff (who work across departments), etc are a major shit show.
That's not to say they can't find out, but it's not easy and frankly they don't do it because they don't have to.
Hospitals are defying it and not posting prices with no repercussions.
> In the three years since, disclosure of these price lists has been hit and miss. Some hospitals posted partial price lists, others none at all. (They were probably counting on not getting caught.) Two hospitals fined over $1M combined in 2021 for refusing to host these files (but since the penalty, have since taken a U-turn and published their prices.) This might have been to send a message to the other hospitals to get serious.
You don't just "send a message" once, you fine hospitals not compliant, period. We do this for other regulations.
So at this rate maybe in 2040 most hospitals will post their prices, maybe. If everyone feels like following / enforcing the law.
Also, did you read the guidelines?
> Please don't comment on whether someone read an article.
So these higher prices, create higher premiums, which create higher profit, so there is no actual incentive for the insurance companies to get hospital prices down because the majority of their insured users are not going to be getting massive bills throughout the year and also they can still litigate or pass healthcare costs back to the customer due to coverage issues and let's not forget deductibles.
Imagine the long-term cost savings to the consumers if massive insurance companies were banned from lobbying or "influencing" lawmakers.
https://www.dolthub.com/repositories/dolthub/hospital-price-...
After my second or third major project to support ICD-10 codes, I knew this was an industry I really didn't want to create software for, but also that it was an industry that definitely could use some quality solutions.
>> Check us out! augusthealth.com
I know that some hospital price data has been previously available for years on govt websites listed by billing code. You could, for example, see the price differential between getting a procedure done in Alabama vs. Oregon. This article states that hospital data was only available after 2019. Is the distinction that the previous data was only based on Medicare/Medicaid reimbursements? Or that they weren't itemized lists?
This data is collected from hospital “chargemasters” - which lay out the maximum amount a hospital will charge for a given procedure. However, hospitals have negotiated rates with payors that are almost always less than the chargemaster rate and are kept private.
As a broad generalization, you can think of Medicare prices as the minimum a hospital will normally charge, and the chargemaster rate as a legally-enforced maximum.
https://www.ahd.com/free_profile/010001/Southeast_Health_Med...
Aggregate data (or "list prices", MSRPs) have been available in some cases for a while now, depending on the state and context.
Hilarity will ensue, since US pricing is an unbelievable rip-off.
Edit: In addition to procedures, there is a list for fixed drug cost [2]. The site hosts a PDF with pricing for any drug.
[0]https://de.wikipedia.org/wiki/Gebührenordnung_für_Ärzte
[1]https://www.ottonova.de/en/expat-guide/health-wiki/medical-f...
[2]https://www.bfarm.de/EN/Medicinal-products/Information-on-me...
I went to urgent care back in 2021 to have a few different tests run, pretty standard stuff. I asked for a price quote and they refused to give it to me. There is no other industry where sleazy practices like this are accepted.
A single MRI can take up to 200 gb of storage space. The health system has about 7.5 petabytes of data in storage arrays alone, all of which is active and separate from backups.
About one petabyte of that data is unstructured (which includes MRIs and other imaging data), and that’s the type of data that’s growing quickest.
This is being done on purpose to obfuscate the pricing scheme. A shame on the industry. I have hope that, together, we can succeed and crack this.
[1] https://www.itprotoday.com/file-storage-and-block-storage/ho...
* not sure how reliable this one source is, there isn't much information out there to verify against.
The system favors the insurance companies and the healthcare providers, but puts its thumb on the scale for anyone else. And that system is slow to change for exactly that reason. That is, the status quo is quite happy printing money. Anyone else? Not so happy.
If only health care was about health and care.
