How much will that surgery cost? Hospital prices remain largely unhelpful

Miami Herald

03-04-2025

It's a holy grail of health care: forcing the industry to reveal prices negotiated between health plans and hospitals — information that had long been treated as a trade secret. And among the flurry of executive orders President Donald Trump signed during his first five weeks back in office was a promise to 'Make America Healthy Again' by giving patients accurate healthcare prices.
The goal is to force hospitals and health insurance companies to make it easier for consumers to compare the actual prices of medical procedures and prescription drugs. Trump gave his administration until the end of May to come up with a standard and a mechanism to make sure the healthcare industry complies.
But Trump's 2025 order is also a symbol of how little progress the country has made since he issued a similar directive nearly six years ago. Consumers find it only partially useful, and the quality of the information is spotty.
A 'bold' first step in pricing that fizzled
The 2019 order was 'pretty bold,' said Gary Claxton, a senior vice president at KFF, a health information nonprofit that includes KFF Health News. 'They basically went at the providers and the plans and said, 'All this data you think is confidential we're not going to make confidential anymore.''
What followed was, to consumer advocacy groups, a disappointment. Hospitals and insurers posted on websites voluminous, complex, and confusing data about their prices. The information has been a challenge for even experts in health care pricing to navigate, let alone consumers. Some members of Congress filed legislation to put the force of law behind price transparency requirements; those bills died. And President Joe Biden's administration was criticized for not more stringently enforcing the regulations, with one consumer advocacy group even buying a Super Bowl ad featuring the rapper Fat Joe alleging that 'hospitals and insurers hide their prices.'
Trump's new order, signed in February, said that hospitals and health plans 'were not adequately held to account when their price transparency data was incomplete or not even posted at all.'
The Government Accountability Office reported in October that the Centers for Medicare & Medicaid Services didn't know whether prices reported by the healthcare industry were correct or complete. But CMS, which regulates hospitals, now plans to 'systematically monitor compliance' and help institutions understand the requirements, said Catherine Howden, an agency spokesperson.
Howden did not answer questions about whether CMS staffers overseeing price transparency compliance have been fired as part of the Trump administration's wide-ranging effort to cut the federal workforce.
'Zombie' rates and other inconsistencies
Meanwhile, independent researchers have found numerous problems with the quality of price data both hospitals and health insurers do share with consumers.
A recent report from the Peterson-KFF Health System Tracker found that data reported by four health insurers in New York City often included prices that they say they pay hospitals for services that those health providers don't — or can't — provide. These are called 'ghost' or 'zombie' rates. For example, the health plans reported dentists, optometrists and audiologists receiving payments for knee replacements, gastrointestinal exams, and other procedures unrelated to their specialties.
In other cases, the data included different prices for the same service paid for by the same insurer at the same hospital. UnitedHealthcare, for example, reported paying New York-Presbyterian/Weill Cornell Medical Center three rates — $47,000, $64,000, and $70,000 — to treat a heart attack.
Or, the insurers reported paying the same price for vastly different services. Aetna, for example, said it paid exactly $6,292 to Mount Sinai Beth Israel hospital for the treatment of respiratory infections, heart attacks, cancers of the digestive tract, kidney and urinary tract infections, and psychosis.
Neither UnitedHealthcare nor Aetna addressed the discrepancies in the data. Cole Manbeck, a spokesperson for UnitedHealthcare, said the insurer has met price transparency requirements and urged members 'to use our cost-estimator tools for exact costs based on their specific health plan.' Aetna spokesperson Shelly Bendit referred questions to AHIP, a lobbying and trade association for insurers.
Health insurers have 'strongly supported' price transparency, said Chris Bond, a spokesperson for AHIP. The group will work with the Trump administration to provide transparency 'in a way that is meaningful for the end user, while also promoting a competitive private market,' Bond said.
What's a health consumer to do?
Estimates and total prices aren't very useful for consumers, who are mainly interested in what they'll ultimately have to pay out-of-pocket, said David Cutler, a professor of applied economics at Harvard University. That can vary by health plan, depending on deductibles, co-payments, and other fees.
'Most of the price transparency information doesn't have that,' he said.
It also doesn't give consumers information about the quality of care, Cutler added, which can lead to an old bias. 'It's kind of like wine when you go to the restaurant,' he said. 'People assume that the more expensive wine is better.'
Cutler said he's skeptical that price transparency will lower costs for patients. But he said it may offer insight to hospitals and health plans about what their competitors are charging and paying for services — knowledge that could inadvertently lead to price increases if hospitals that receive a lower rate than a competitor demand higher reimbursement from health plans.
Trump's recent executive order notes that the top quarter of the most expensive health service prices have dropped by 6.3% a year since his 2019 order.
However, the same research referenced in the executive order showed that the bottom quarter of services got more expensive, at a rate of about 3.4% per year, according to the analysis by Turquoise Health, a health care price data firm that examined rates at more than 200 hospitals in the 10 largest U.S. markets.
Some patients say that with research and persistence, they've been able to make price transparency work for them.
Theresa Schmotzer, 50, of Goodyear, Arizona, said she used hospital price data to save nearly $3,000 on outpatient surgery to have a fibroid removed last year.
Schmotzer, who has health insurance, said the hospital first told her she would owe $3,700 for the procedure and wanted the payment upfront. But she was skeptical.
She said her health insurer was unable to quote a price for the procedure or specify how much she would owe. The morning of the surgery, Schmotzer said, she found a spreadsheet online at PatientRightsAdvocate.org that included different prices paid by insurers, including hers. The reported price for the procedure was closer to $700, she said.
Schmotzer said she took a printout of the spreadsheet to the hospital and presented it during preadmission. She paid her $300 deductible and told the hospital to bill her for the rest.
A few months later, she said, the bill arrived in the mail for the remaining $400, which she paid.
When people go for surgery and aren't clear upfront what the cost will be, it stokes fear, she said. 'Because they're going in blind.'
Next steps for hospital and health plan pricing
Hospitals say they want to work with federal regulators and comply with reporting requirements, said Ariel Levin, director of coverage policy for the American Hospital Association, which represents about 5,000 institutions. Levin said consumers should be given the price of services and 'a more comprehensive estimate' that represents an entire episode of care and the amount they'll owe out-of-pocket, based on their health plan.
CMS has developed rules since Trump's 2019 order to make price information reported by hospitals and health plans easier to understand, and the agency has fined more than a dozen hospitals for failing to comply.
Federal rules allow hospitals to report an estimate, a price range, or a historical rate for their services, while health plans can adjust prices based on factors like the severity of the case, the length of treatment, and a patient's age.
KFF's Claxton said that such flexibility doesn't allow for 'apples-to-apples comparisons' and that the data must be reliable before researchers can use it to better understand health care costs. 'It doesn't seem to be that yet,' he said.
Much remains to be done before price transparency lives up to expectations that it will increase competition and lower costs, said Katie Martin, chief executive of the Health Care Cost Institute, a nonprofit research group.
Price transparency alone is not a silver bullet, Martin said. It's 'a critical first step' for employers, lawmakers, regulators, and others to better understand how money flows through the health care system and how to make it more efficient, she said. 'It's not the whole thing.'
KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.