Health
5:10 pm
Mon April 21, 2014

How One Hospital Hopes To Lure Patients With Clearer Prices

You don’t drop everything to go get a colonoscopy.

But after a decade of waiting, 63-year old Richard Coll of Manchester knew he couldn’t keep putting it off.

“It’s something you got to do, you’re supposed to do," says Coll. "There’s a little history in my family, so I was encouraged to do it.”

But he doesn’t have insurance and the price tag—actually the lack of a price tag-—kept getting in the way.

“[I was] shopping around, and everyone I asked, whether it was the doctor or an institution like a hospital, they looked at me like I was crazy,” says Coll.

Richard Coll saw an advertisement for a flat-rate colonoscopy in his local paper.
Credit Todd Bookman / NHPR

As a property manager, he prices out building materials before purchasing. He couldn’t understand why a colonoscopy didn’t work the same way.

Then earlier this year, Coll saw an advertisement in the Sunday paper offering a $1,995 colonoscopy, due in advance, from Elliot Hospital. He took them up on the offer.

“It was real easy. Just went in there, they put me to sleep, woke me up, and said, ‘goodbye.’”

Coll got a clean bill of health, and a good price.

The Elliot is now offering colonoscopies, along with hernia repair ($4,995) or knee arthroscopy ($5,995), for one all-inclusive fee. It calls them CareBundles.

“Understandably, everyone in America is frustrated by the lack of transparency in health care,” says Dr. Rick Phelps, President of Elliot Hospital. “I think that frustration has been exacerbated with all of the high deductible health plans that are out there. So now we’ve created consumerism; the problem is we haven’t armed the consumer with access to the information they need to make smart decisions.”

Transparency isn’t widespread in health care, but it isn’t exactly new to New Hampshire. In 2007 the state Insurance Department launched nhhealthcost.org, a little-marketed website that lists the prices for about 40 common procedures at hospitals around the state.

In its infancy, the project offered something of a laboratory for how transparency could impact the cost of care.

“It does lead to a lot of follow up questions, and one of them is whether or not the market would respond,” says Tyler Brannen with the N.H. Insurance Department. He says researchers tracked the data to see if hospital prices reacted to the sunshine.

"The problem is we haven't armed the consumer with access to the information they need to make smart decisions."

That is, would some of the market variability be smoothed out by more transparency? Would hospitals that charge more for that colonoscopy be forced to lower their prices?

The results, in the end, suggested otherwise.

“We did not see, essentially, the market responding,” says Brannen.

He says what is changing has more to do with how insurance companies design plans. Many now offer incentives including reduced co-pays if you use a preferred medical provider.

Some large employers are following a similar track. Walmart, Lowe’s & Pepsico have struck deals with hospitals around the country, including the Mayo Clinic, where an employee’s surgery can be performed with a fixed, known cost to the company. 

Elliot Hospital hopes to launch similar relationships through its CareBundles. But for now, only the uninsured can get the set-price procedures.

“In our disclaimer on our ad, the first word is regrettably,” says Dr. Phelps. “And I want to emphasize that. We truly regret at this moment that we don’t have the capacity to offer these CareBundles to all employers, to all patients, to all insurers.”

The barriers include the complicated web of contracts that bind hospitals, doctors and insurers. Phelps also says there are IT challenges to making the bundles work.

But with ever-rising deductibles, even insured patients are pressuring the industry to put a clearer price on their care.