Hospital Price Data—There’s an App for That

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JLP / Jose Luis Pelaez / zefa / Corbis

Imagine this: You get a hospital bill in the mail and, before paying it, you plug its contents into a smartphone app. Up pops information on whether the prices you’ve been charged are in line with national averages, along with recommendations about how to dispute the bill if you choose. Or take this scenario: Your doctor recommends you get knee surgery. You key in your zip code and the type of surgery you need and immediately access a list of nearby surgical facilities and information about quality and cost metrics for each. As a bonus, you also get information on your own doctor, including how much he earns in Medicare payments every year and his complication rate for the type of surgery you need.

This future might be a long way off, but if a recent wave of public disclosures on hospital prices and quality information are any guide, it’s coming eventually. Hospitals are being pressured to make the prices they charge patients and insurance companies publicly available and quality measures for health care providers are being collected and analyzed by the federal government like never before. At the same time, developers in Silicon Valley and beyond are building new consumer applications to make this information easy to find. In an emergency, comparison shopping for health care may not be possible, but for common outpatient procedures and scheduled surgeries, the convergence of these trends has the potential to create more competition and more informed consumer choice—and ultimately, downward price pressure on health care services.

(Cover Story: Bitter Pill: Why Medical Bills Are Killing Us)

A new web site, OpsCost.com, recently took a giant spreadsheet of data on hospital inpatient procedures released by the federal government and made it searchable by region and procedure through a clean and easy-to-use interface. A user can enter his or her location and procedure and get a list of nearby hospitals with information on what the facilities billed Medicare and what Medicare ultimately paid. For someone with private insurance or Medicare, the information might provide insight into the cost of co-insurance for a hospital stay, which is the charge a patient is responsible for based on a percentage of a hospital’s total charge. For someone who is uninsured and gets charged full price, the differences between hospitals could be even more important.

“We saw the [HHS] data get released and we said, ‘Someone is bound to post this in an easy-to-search format,’” says George Kalogeropoulos, who co-founded OpsCost.com. “But it went a week and there was nothing.” Kalogeropoulos and his OpsCost.com partner, Ning Liang, collect and organize data on nationwide rental prices for a web site called RentMetrics.com. Doing the same for hospital price data was easy in comparison. Kalogeropoulos says within a day, Liang, who specializes in programming and has worked at Pinterest and Twitter, had an early version of OpsCost.com set up. Kalogeropoulos says the site had some 15,000 visitors the first week it existed, although he adds that it’s unclear whether or how OpsCost.com could ever generate a profit. (RentMetrics.com sells its data to investment funds that evaluate real estate.)

Shortly after HHS released the data on inpatient procedures used on OpsCost.com, the department decided to do the same for common outpatient procedures. It published another massive spreadsheet of prices at hospitals nationwide, but like the earlier information, most consumers will probably never find it or search it easily. Yet, there are signs federal and state health officials recognize the power of this kind of data won’t be fully realized if consumers don’t access it en masse.

(MORE: Patients Who Are More Involved in Medical Decisions Pay More)

In 2005, the Centers for Medicare and Medicaid Services launched an online tool called Hospital Compare, which allows users to compare quality measures at various facilities in their geographic area. The site displays statistics garnered from patient satisfaction surveys and government-collected data sets, like information on whether a hospital’s morbidity and readmission rates are higher, lower or the same than the national average.

In Arizona, the state health department announced earlier this month that it was launching a state-based hospital comparison tool online. The site is based on 2011 discharge information from hospitals in the state and allows users to compare hospitals based on prices and quality measures.

In early June, the Robert Wood Johnson Foundation, a non-partisan, non-profit organization that funds research on public health, announced a competition for web developers to build digital products that make it easier for consumers to compare health care prices. The contest, which will award $120,000 in prize money later this year, has two categories for competition. The first asks developers to create visualizations that consumer to better understand price data; the second calls for apps and tools that could allow consumers “to analyze and potentially leverage the data for purchasing decisions or to negotiate bills.”

For now, insurers and hospitals are still cagey about disclosing prices and payments, which limits the information publicly available. “They want to access their competitors’ data, but they don’t want to share,” says Kalogeropoulos. Because of this, most of the data available to web developers still comes from the government and is largely based on Medicare. But consumers hold some power too. OpsCost.com has a function that allows users to submit their own bills to the site digitally or via fax.

MORE: Tips for Lowering Your Medical Bills

4 comments
sixtymile
sixtymile

I just got a medical statement where the benefits paid the contracted price of approximately 10% of the billed price. Hospitals attract attention because the number of line-items and billing total are so much larger, but everyone is on the same RACE TO OBLIVION. This is INSANE!!.

Maybe we could do this like windshield replacement -- where if you don't have coverage you pay less...

MustBeReallyBored
MustBeReallyBored

Comparing prices from one hospital to the next may help in the short term, but then the hospitals will go to the corner gas station model. Employee just looks across the corner to see what the other hospital is billing for a knee replacement, and they change their sign to reflect the same, just like gas stations. If these clowns decide to collaborate (and when there's money involved, they will) they can agree to an overall increase in cost, price them out all the same, and again we're simply paying too much for healthcare.

The only way to change these "metrics" is to find out what the hospital pays for materials that go into your treatment plan.

For starters, I'd like to see federal mandates that make it so that hospitals cannot charge you more than 20% more that what it costs them on the invoice for any specific material (not the list price, the INVOICE price) with the 20% extra to allow for shipping, storage (don't worry, hospitals don't stock more than 30 days of anything), and delivery of materials to the patient.

gysgt213
gysgt213 like.author.displayName like.author.displayName like.author.displayName 3 Like

Imagine this: Your doctor tells you need knee surgery, but instead of needing an app that confuses you even more you have universal health coverage with universal pricing and universal standards of care.  All the clinics, doctors and hospitals in your area are focused on serving their communities instead of competing against each other like department stores.  Or we could just pick and choose between apps.  That will get that knee fixed.

MustBeReallyBored
MustBeReallyBored

That'll take a lot of imagining to make the greed factor go away, but it sounds good!