From the U.S. Government Accountability Office, www.gao.gov

Transcript for: Transparency of Health Care Prices to Consumers

Audio interview by GAO staff with Linda Kohn, Director, Health Care

Related GAO Work: GAO-11-791: Health Care Price Transparency: Meaningful
Price Information Is Difficult for Consumers to Obtain Prior to
Receiving Care

Released on: October 24, 2011

[ Background Music ]

[ Narrator: ] Welcome to GAO's Watchdog Report, your source for news and
information from the Government Accountability Office. It's October 24,
2011. Consumers are increasingly responsible for a growing proportion of
their health care costs but getting complete information about the
extent of those costs can be challenging. A group lead by Linda Kohn, a
director in GAO's Health Care team, recently reviewed issues surrounding
the availability of health care price information for consumers. GAO's
Jeremy Cluchey sat down with Linda to learn more.

[ Jeremy Cluchey: ] Can you talk a little bit about some of the
challenges that consumers face in obtaining health care price
information?

[ Linda Kohn: ] Sure Jeremy, you're right it is challenging for people
to find out how much a health care service will cost them personally
before getting the service. Typically you go to your provider, hospital,
or physician; you receive a service from them; and weeks later you find
out what you owe—what is the price to you? I personally had a physician
prescribe a treatment and I asked the office what it would run me. I was
told to contact my insurance company, which I did. The insurance company
said they couldn't answer without knowing how the doctor would code it
and how the bill would be submitted. So I went back to the doctor and I
said what is this code going to be, how are you going to submit it, and
they said I don't know I can't tell you till after we do it, I gave up.
So there are several challenges to making health care prices more
transparent and available to people, some of which are particular to
health care and some are due to general legal issues.

[ Jeremy Cluchey: ] Your team examines some existing initiatives aimed
at making this price information available to consumers, what did you
find?

[ Linda Kohn: ] We found that getting complete cost information may be
difficult but it's not impossible, it can be done. As part of this
report we looked at eight different initiatives that make price
information available to consumers. We really took a consumer or patient
view on this, the perspective of someone who is planning for a specific
service and wanted to know what it would cost them—what's the price to
me? Among the eight initiatives, one was a federal initiative sponsored
by Medicare, five were done at a state level, and two were done by
national private insurance companies and were available to the people
covered by those plans. Of the eight initiatives we looked at, only two,
just two of them, provided what we call complete price
information—meaning that it included the negotiated rate, not the bill
charge; it included all or most associated costs, hospital, physician,
lab, etc., the mix of services; and it identified a person's estimated
out of pocket costs, the price to me. One of these was a private insurer
and one of these was a state sponsored initiative.

[ Jeremy Cluchey: ] What is GAO recommending be done to help try and
improve the transparency of health care price information?

[ Linda Kohn: ] We are making a recommendation to HHS that it determine
the feasibility of making estimates of complete costs of health care
services to consumers available through various current and forthcoming
efforts, and as appropriate, identify the next steps needed to move this
forward. It is also expected that HHS will expand its efforts in price
transparency in the future.

[ Jeremy Cluchey: ] For tax payers both with and without health
insurance who are interested in having a better understanding of the
health care costs that they face, what is the bottom line of this
report?

[ Linda Kohn: ] Jeremy, the bottom line of our report is that it is very
difficult for consumers to obtain meaningful price information prior to
receiving care. Some experts have said that consumers aren't price
sensitive when it comes to health care, it's not like buying other
products or services, and additionally, insurance masks the full cost of
care. But if it's so hard to get the information, how can consumers be
sensitive to costs? Yet you're on the hook for those costs, it may be
all of the cost if you're uninsured or it may be a portion of the cost
if you have insurance but even that portion can be sizeable, and
although there are challenges to making such information available we
found some initiatives were able to do it, they were able to provide
complete and meaningful cost information so it can be done, it is
attainable.

[ Background Music ]

[ Narrator: ] To learn more, visit GAO's website at gao.gov and be sure
to tune in to the next edition of GAO's Watchdog Report for more from
the congressional watchdog, the Government Accountability Office.