Auditor: Price transparency still lacking in Vermont health care

Doug Hoffer. Photo by Roger Crowley/VTDigger
Doug Hoffer. Photo by Roger Crowley/VTDigger

By Erin Mansfield

For Vermont Digger

The Vermont State Auditor’s office says the state has more work to do to make sure consumers know how much their health care services cost before they purchase them.

In a non-audit report Doug Hoffer’s staff released last week, the office said that consumers often cannot find out the cost of health services, especially if they’re not proficient with technology.

The Dec. 12 report is a followup to Hoffer’s efforts in 2014 to increase price transparency in the health care field, which he said was increasingly important because both insured and uninsured Vermonters can face high out-of-pocket costs.

Across the nation’s health care industry, hospitals and doctor’s offices do not publish price lists for their consumers to peruse before they choose to get treatment. Instead, consumers receive their service first, and the doctor or hospital then bills the insurance company for every service the person received.

Once they get the bill, the insurance company will attempt to lower what the hospital charged them, either by enforcing a contract they have already negotiated that says how much the company has to pay the doctor or hospital, or by negotiating a new deal through a back-and-forth process.

The insurance company that has negotiated the best deal with the health care provider will pay the least amount for that service, meaning that the bigger insurance companies will often pay less than the smaller ones, and there is no market price for a health care service.

In contrast, the government-funded Medicaid and Medicare programs pay fixed prices for services and do not have to negotiate down prices. People without insurance have virtually no bargaining power to negotiate the price of a service, and must rely on charity care policies that the hospital sets rules for internally.

A years-old database called VHCURES — which the Green Mountain Care Board uses to perform analysis that leads to regulation — was initially set up to also provide consumers with health care pricing information to help them shop for providers, Hoffer’s office noted in 2014. The consumer use never transpired, and despite Hoffer’s probe and Legislature language in Act 54 requiring the board to study making a website using the database, such a site has never been created.

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