On Your Side: Healthcare pricing website offers 'comparative menu'
It's one of the only services we pay for in which we don't know the price until after we receive it. And healthcare costs can vary wildly from hospital to doctor. Now a new website is trying to take the guesswork out of the cost of medical care.
Last year the Health Plan Price Transparency Act went into effect. It requires both hospitals and insurance companies to disclose pricing for medical procedures and services.
Now a website is gathering and posting that data to help consumers know what they'll pay -- before they go the hospital or the doctor.
The healthcare industry is one of the few industries where you often don't know how much you'll pay for a service.
"We always describe it, it's like going and buying a car, and then a month later, the bank tells you how much you need to pay for the car," said RefMed President and CEO Todd McDaniel.
RefMed.com is a new website that aims to take the guesswork out of healthcare.
"RefMed is a healthcare pricing data service, so our idea and the way we kind of explain it to people is we want to be the Kelley Blue Book for healthcare," said McDaniel.
A federal law that went into effect last year requires hospitals to publish the rates they negotiate with insurance companies, and the discounted rates they'll accept for cash-paying customers. RefMed takes that data and puts it all on a single searchable website.
The site is still in its infancy, but already consumers in the Los Angeles area can search more than 4,000 services at the 10 largest local hospitals.
"And so you can type in 'back surgery' and you can see the rate at your local hospital or other hospitals in your area," said McDaniel.
That allows consumers to shop around. Take this example of an emergency room visit:
"The rates vary from $4,100 as the gross price at L.A. Community Hospital to $7,300 at Cedars-Sinai," said McDaneil.
But if you look at a laceration repair:
"Cedars-Sinai is $1,300 gross, compared to $12,000 at Martin Luther King," said McDaniel. "So it's not even that you can always say one hospital is always higher than another."
Why would one hospital in the same city be so much more expensive than another hospital?
"I think it's just, you know, there's no real market right now," said McDaniel. "So you put whatever amount out there you think you can get and you work from there."
And before you get mad at a doctor for the price you pay for healthcare, McDaniel says between 40 and 60 percent of what you pay for your healthcare does not end up in the provider's pocket -- the rest goes to insurance and hospital executives.
