The cost of hospital care is difficult to pin down

June 08, 2008|By Stacey Burling, Inquirer Staff Writer

Inspired by the story of an uninsured couple who were told they would have to pay anywhere from $15,000 to $40,000 to have a baby in various New Jersey hospitals, famed health economist Uwe Reinhardt tried an experiment.

He asked his wife to call a hospital and find out how much a normal birth costs.

"She just couldn't weasel it out of them," said Reinhardt, who works at Princeton University and this year chaired a high-profile commission that evaluated the financial health of New Jersey's hospitals.

Story continues below.

So Reinhardt tried himself. He was able to extract a number from a supervisor, but only after he had explained rather haughtily who he was.

In health-policy circles, there has been a lot of talk in recent years about "consumer-directed health care" and "price transparency," fancy ways of saying Americans might spend a few gazillion less dollars on health care if they could figure out, in advance, how much things cost and had a reason to care. With the number of people with high-deductible insurance plans or no insurance growing, more people have a reason to care.

The Bush administration has strongly endorsed the idea that information about prices will drive Americans toward more cost-effective care. Barack Obama and John McCain are calling for greater price transparency.

Reinhardt agrees that is not too much to ask. "We know what a Chevy costs. We know what a haircut costs," he said.

"It's just simply bizarre. . . . I don't have to hang forever on the phone to get the price of an iPod."

For all the talk, though, many nascent attempts to help consumers compare prices are deeply flawed. "A lot of the price information that's available from public sources is essentially useless," said Paul Ginsburg, president of the Center for Studying Health System Change.

Reinhardt's experiment helps explain why.

The quest for information

Should you attempt to do this experiment on your own, as an Inquirer reporter did with eight hospitals in the region, prepare to hear a lot of canned music and automated voices. And prepare to enter a world so Byzantine that a top Medicare administrator pronounced it impossible for a "human being of average intelligence and limited patience" to understand. The reporter, who is, at least, patient, persisted and will spare you the most painful parts of the odyssey.

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