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Finding consistent prices for hospital services remains difficult

By Jeff Levin-Scherz, MD, MBA | October 26, 2023

Our population health leader weighs in on hospital pricing transparency, disparate out-of-pocket costs for women, vaccinations in pregnancy and more.
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Hospitals report different prices online and by telephone

Over a year after federal hospital pricing transparency regulations went into effect, it is still hard to get hospitals to provide transparent pricing, according to a recent JAMA Internal Medicine report.

Over a third of top-ranked hospitals and almost four in five other hospitals could not say what they would bill for a facility fee for vaginal childbirth. Half of safety-net hospitals couldn’t provide telephonic or online reporting for the cost of brain MRIs.

Researchers reviewed websites and inquired by telephone for healthcare prices at a diverse group of 60 hospitals for two services: vaginal childbirth, and brain MRI scans. For each procedure, they asked for the price of a single medical billing code.

JAMA discovered a poor correlation between prices found on the web and those quoted by phone. The study found that many hospitals showed different prices online and when queried by telephone. The researchers cannot say whether either of these price quotes reflect what the hospital ultimately bills.

Implications for employers:

  • Be aware that it is difficult for patients to find accurate prices for medical procedures.
  • Employers should be skeptical of claims that transparency will allow members to “shop” health providers for lower prices. Patients cannot shop for many services (such as anesthesia or pathology), and patients whose costs represents a large portion of total medical expenses will exceed the maximum out-of-pocket cost and will have no financial incentive to shop.
  • Health plan transparency requirements include providing machine-readable files to third parties, so hopefully we will have better transparency in healthcare pricing in the coming years.

Women pay $15 billion a year more than men in out-of-pocket healthcare costs

A recent report showed that women spend $15.3 billion more than men in out-of-pocket costs, largely because women use more health services. This difference persisted even after costs of childbirth were removed. Men are more likely to wait two years between medical visits, and almost half of men have under $1,000 in medical costs each year. The research also showed:

  • Only one-third of women have medical costs of under $1,000 each year.
  • Women have higher out-of-pocket costs than men in categories across healthcare, including radiology, laboratory, mental health, emergency department and office visits.
  • Women have higher out-of-pocket costs at all age groups, even when maternity costs are excluded.

This analysis doesn’t include pharmacy data, which represents an increasing portion of medical and out-of-pocket expenses. Further, the researchers were not evaluating the appropriateness of care.

This adds to evidence of a healthcare cost gap for women.

Implications for employers:

  • Low-wage female workers are at higher risk for financial insecurity due to out-of-pocket medical expenses than low-wage male workers.
  • Employers can evaluate out-of-pocket costs for maternity care, which hits parents when they tend to have higher expenses and lower incomes after the birth of their baby.
  • Employers can do an analysis of out-of-pocket costs by gender to see if the higher cost burden on women is applicable to their population.
  • Customized health plan designs offered to low-wage workers can help address this issue, although the most effective solutions are lower healthcare prices, lower healthcare use or improved worker health.
  • Increased out-of-pocket costs for women compounds the well-known problem of the gender pay gap – women earning lower wages than men in comparable positions.

COVID-19 and other vaccinations in pregnancy

Historically, we are reluctant to test any new medicines or vaccines on pregnant women, in part because adverse effects could impact both the mother and the fetus. However, there is growing evidence that a pregnant woman’s immune system can help protect her baby against severe diseases in infancy. This is especially important because we don’t administer vaccinations to babies until six months of age.

A study released by the Centers for Disease Control and Prevention (CDC) in September shows that:

  • Women, who received COVID-19 vaccines during their pregnancies, had babies that were 35% less likely to be hospitalized with COVID-19 than babies of mothers who did not receive a vaccination during pregnancy.
  • Almost a quarter (23%) of babies hospitalized with COVID-19 required intensive care, and those whose mothers did not receive the vaccine during pregnancy were nine times more likely to need mechanical ventilation.

There are additional vaccinations that pregnant women should strongly consider:

Prior research into influenza’s impact on pregnant women and newborns shows similar protective benefits as the CDC’s COVID-19 research. Women who are pregnant are two to three times more likely to be hospitalized and die of influenza compared to non-pregnant women. And women who get flu shots during pregnancy have fewer miscarriages, preterm births and children with low birth weight.

Implications for employers

  • Employers can remind employees that the CDC’s Advisory Committee for Immunization Practices recommends vaccinations for pregnant women and these vaccines are covered by employer-sponsored health plans without cost sharing.

Pandemic associated with spike of diabetes among children

During the pandemic, rates of Type 1 and Type 2 diabetes among people under 20 increased 20%, according to a report in JAMA Network Open from researchers at Kaiser Permanente of Southern California. Age standardized risk for diabetes over this period went up from 19.55 to 24.27 per 100,000 children – a 20% increase.

The researchers used the data warehouse from Kaiser Permanente's electronic health record, which has data on 4.8 million health plan members. Electronic health records are often clinically more accurate than health plan claims, but the data is more difficult to analyze as it is often unstructured.

It’s not a surprise that the pandemic led to an increase in cases of diabetes among children.

  • Type 1 diabetes, an autoimmune phenomenon, often follows a viral illness.
  • Type 2 diabetes is associated with obesity and weight increased during the pandemic.

Diabetes is one of many inflammatory illnesses that are seen at a higher rate following a COVID-19 infection. Data also shows an increased risk of autoimmune diseases including rheumatoid arthritis, lupus and inflammatory bowel disease, and an increased risk of cardiovascular disease, including both heart attacks and strokes.

These are all associations and causality. For example, people might have had an underlying disease that was only diagnosed because they sought medical attention for their COVID-19.

It’s reassuring to see the rate of new cases of diabetes declining in the later years of this study. Nonetheless, the spike in 2020 of newly diagnosed people with diabetes will mean that the prevalence of diabetes will continue to be higher in this generation.

Implications for employers:

  • Higher rates of diseases including diabetes in those who have had COVID-19 could lead to higher medical costs in the future.
  • Employers can continue to encourage COVID-19 vaccinations as a method to decrease overall healthcare risk. The CDC’s Advisory Committee on Immunization Practices found that the medical advantages of COVID-19 vaccines outweigh any disadvantages in every age group.

Population Health Leader, Health and Benefits, North America

Jeff is an internal medicine physician and has led WTW’s clinical response to COVID-19 and other health-related topics. He has served in leadership roles in provider organizations and a health plan and is an Assistant Professor at Harvard Chan School of Public Health.

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