Company Details True Cost of Health Care

Monday, March 20th 2006, 10:13 am

By: News On 6

DENVER (AP) _ As the Bush administration presses for wider use of health savings accounts, experts acknowledge that a big piece of the puzzle is still missing: ready access to the true cost of a medical procedure.

Costs for gastric-bypass surgery, for example, can vary by tens of thousands of dollars, translating to a wide range of out-of-pocket expenses for patients, according to a Colorado company that plans to sell pricing information.

Beginning Monday, consumers can learn the cost of 42 medical procedures ranging from gastric bypass to cataract surgery through the Web site of HealthGrades Inc., based in suburban Denver. The company plans to add information for 14 more procedures soon.

``What this helps an individual do is to shop for health care, which is a very new concept,'' said Scott Shapiro, a spokesman for the company. ``But because individuals are paying an increasing amount from out of pocket for their health care, they are increasingly looking for information that helps them shop for health care.''

The information isn't free. For $7.95 and details including a patient's zip code, age, gender and insurance co-pay, the site will generate a report giving expected out-of-pocket costs for people with insurance; the average price negotiated by health insurers in the region; and the average amount charged by the provider, a figure usually paid only by uninsured patients, Shapiro said.

Some insurers already make such information available to their customers.

On their own, patients usually find such information is difficult to obtain. When it is available, it's usually cryptic and hard to understand, said Steve Weisbart, an economist with the Insurance Information Institute, a nonprofit supported by the insurance industry.

``The people for whom the costs are incurred _ the patients _ have no idea what the true cost of these procedures are,'' Weisbart said. ``It's appealing because Americans respond to prices because the availability of comparative information often puts them in a position where they can make meaningful choices.''

Health savings accounts work best when consumers know how much a procedure will cost, said Wendy Morphew, a spokeswoman for Aetna Inc., which covers about 14.8 million people.

Last summer, Aetna opened a pilot project in Cincinnati to provide its members in that area the costs of about 600 medical procedures, and it plans to expand the pilot to more areas this fall, she said.

``This is not about cost savings for Aetna. What's in it for Aetna is we do believe the entire health care system will benefit as more people become educated on quality first, but also on the price of things, just so they can start having these discussions with their doctors,'' Morphew said. ``As it stands now, people don't have that information until after they've seen the physician and that seemed backward to us.''

Last month, President Bush said providing consumers accurate price information could help control the country's soaring health care costs.

As such information becomes widely available, health care costs could ease, Weisbart said.

``Even when the information isn't being used on a widespread basis, there will obviously be pressure on the high-cost institutions to bring their prices down, if for no other reason than because they look bad,'' he said.

To qualify for a health savings account, a person must buy a separate health insurance policy with a high deductible. Enrollment in such plans has tripled in the past 10 months, administration officials have said.

People with high-deductible plans see lower premiums and can get a tax break. But they also have to pay more out-of-pocket before their insurance takes over for any significant medical expenses.

HealthGrades obtains its pricing information from 80 health plans covering about 55 million people, Shapiro said.