'Open Systems' for Consumers Comparison Shopping for Healthcare

Americans can comparison shop online for almost anything today. This ought to apply to the healthcare industry as well. How much are hospitals or clinics charging for medical procedures and other healthcare services? Where is the online Amazon, Best Buy, or Wal-Mart site that you can go to and check the prices before heading off to see your doctor.

To date, many people have not chosen to comparison shop for medical care.  For example, I have insurance that pays most of the bills and I leave it up to the insurance company to haggle with healthcare providers over cost.  Many other Americans are covered by Medicare, Medicaid, the Military Health System, State Hospitals, Veterans Health Administration, Indian Health, or other government run programs. There too they leave the shopping for cost effective services in the hands of others.

Who really knows what a hospital visit or medical procedures ought to really cost? Who cares if you are leaving that in the hands of insurance companies, your employer, or the government? Why should the American people  start comparison shopping for quality healthcare products or service at lower costs? The information has not been readily available and there has been little incentive to do so – until now.

With the huge bill Americans are paying now for their healthcare, coupled with the public brouhaha raised by opponents to the Health Care Reform Act ('Obamacare'), both citizens and politicians are finally tackling this problem with some very practical solutions. They are collecting hard data on costs and making the data available to the public.

A perfect storm involving the 'Open Access', 'Open Data', and 'Open Source' movements are coming together to help address the situation – out of control healthcare costs. A growing number of 'open' technology and solutions are being brought to bear by both the public and private sector.

To get a feel for what I'm talking about, check out some of the growing number of health information portals that are going into place on the World Wide Web  to help individuals and organizations shop for cost effective healthcare products and services:

State Cost Comparison Systems

• Colorado Hospital Price Report
• Iowa Hospital Charges Compare
• Massachusetts MyHealthCare Options
• Minnesota HealthScores
• New Hampshire Health Costs
• West Virginia Compare Care
• Wisconsin PricePoint System

* Many other states like Maine, North Carolina, Oregon, Tennessee, Utah, and Vermont are in the process of putting up similar healthcare cost comparison systems.

National Public & Private Sector Quality & Cost Comparison Sites

• Healthcare Blue Book
• Healthcare.gov Compare
• Leapfrog Group Hospital Compare
• Medicare Cost Compare
• My Health & Money
• New Choice Health Costs
• OutOfPocket Healthcare Costs

Over the next few years, more 'open data' healthcare quality & cost comparison sites will emerge covering every state. 'Open access' to the data will be provided to everyone as citizens begin to become more involved in healthcare purchasing decisions as a result of healthcare reform. 'Open source' software will also have an effect, especially efforts to develop 'Open' Chargemaster Systems. The 'Open Health' Movement is taking hold and having a positive effect on all.

Let us know about any other Healthcare Cost Comparison web sites you would recommend to others.

Need for an 'Open' Chargemaster System

Every hospital has what's known as a chargemaster, also known as charge description master (CDM). A charge master is a listing of every single procedure that a hospital may provide to its patients. Wikipedia states that  the chargemaster typically serves as the 'starting point' for negotiations with patients and health insurance providers of what amount of money will actually be paid to the hospital. Unfortunately for many in dire medical straights who don't understand hospital billing processes, they may be so overwhelmed that they never think about negotiating with their healthcare provider organization about their bill.

According to HospitalBill.Org, aside from Maryland and California, no state, federal or local law limits what hospitals can charge their patients. Hospitals are free to set their own prices, and each hospital does so in a complex document called the 'chargemaster'. It is well established that chargemaster prices are inflated, vary widely from hospital to hospital, and often have no relation to the actual cost of providing care. 

Insurers, whether public or private, do not pay chargemaster rates. Instead, they negotiate discount rates with each hospital. They are able to do this because they have market power: they can direct patients away from hospitals that charge too much. Self-pay patients, on the other hand, are usually charged the full, inflated chargemaster price for hospital care, and have no leverage to negotiate a discount.

Time Magazine recently published a detailed article written by Steven Brill entitled "Why Medical Bills Are Killing Us". We recommend you take a few minutes to  read it. Frankly, I never heard of a chargemaster until I read this article. It was an eye opener.

Why isn't there a standardized state or national chargemaster document? It seems like this would be a high priority project for the 'Open Health' community to tackle. Why not create a standardized national charge description master or chargemaster and make it available to the public as an 'open access' document? Why not create an 'open access' chargemaster system for use by all hospitals and clinics across the U.S.? 

This is a call to action. If the industry or legislatures can't bring themselves to fix the problem, the 'Open Health' community in the U.S. needs to step up.  Don't let current 'killer' medical billing practices continue. We can do better!