Large Variations in the Prices of Urologic Procedures at Academic Medical Centers 1 Year After Implementation of the Price Transparency Final Rule

Abstract

ImportancePatients with urologic diseases often experience financial toxicity, defined as high levels of financial burden and concern, after receiving care. The Price Transparency Final Rule, which requires hospitals to disclose both the commercial and cash prices for at least 300 services, was implemented to facilitate price shopping, decrease price dispersion, and lower health care costs.ObjectiveTo evaluate compliance with the Price Transparency Final Rule and to quantify variations in the price of urologic procedures among academic hospitals and by insurance class.Design, Setting, and ParticipantsThis was a cross-sectional study that determined the prices of 5 common urologic procedures among academic medical centers and by insurance class. Prices were obtained from the Turquoise Health Database on March 24, 2022. Academic hospitals were identified from the Association of American Medical Colleges website. The 5 most common urologic procedures were cystourethroscopy, prostate biopsy, laparoscopic radical prostatectomy, transurethral resection of the prostate, and ureteroscopy with laser lithotripsy. Using the corresponding Current Procedural Terminology codes, the Turquoise Health Database was queried to identify the cash price, Medicare price, Medicaid price, and commercial insurance price for these procedures.ExposuresThe Price Transparency Final Rule, which went into effect January 1, 2021.Main Outcomes and MeasuresVariability in procedure price among academic medical centers and by insurance class (Medicare, Medicaid, commercial, and cash price).ResultsOf 153 hospitals, only 20 (13%) listed a commercial price for all 5 procedures. The commercial price was reported most often for cystourethroscopy (86 hospitals [56%]) and least often for laparoscopic radical prostatectomy (45 hospitals [29%]). The cash price was lower than the Medicare, Medicaid, and commercial price at 24 hospitals (16%). Prices varied substantially across hospitals for all 5 procedures. There were significant variations in the prices of cystoscopy (χ23 = 85.9; P = .001), prostate biopsy (χ23 = 64.6; P = .001), prostatectomy (χ23 = 24.4; P = .001), transurethral resection of the prostate (χ23 = 51.3; P = .001), and ureteroscopy with laser lithotripsy (χ23 = 63.0; P = .001) by insurance type.Conclusions and RelevanceThese findings suggest that, more than 1 year after the implementation of the Price Transparency Final Rule, there are still large variations in the prices of urologic procedures among academic hospitals and by insurance class. Currently, in certain situations, health care costs could be reduced if patients paid out of pocket. The Centers for Medicare & Medicaid Services may improve price transparency by better enforcing penalties for noncompliance, increasing penalties, and ensuring that hospitals report prices in a way that is easy for patients to access and understand.

Price Transparency in Hospitals—Current Research and Future Directions

“…Second, the commercial prices for the same procedure vary widely across hospitals and within the same hospital . For example, according to our calculations, the IQRs of commercial prices were 65% to 82% of the median price for 5 urologic procedures in the study by Gul et al For 13 shoppable radiology services, the IQR of the commercial prices was 1.3 times the median across all hospitals, and within the same hospital, the maximum commercial price was 3.8 times the minimum price . Between health plans that belong to the same insurance firms and enter into contracts with the same hospital, the maximum price was approximately 1.2 times the minimum price .…”

“…For example, Gul et al 1 note that as of March 2022, only 29% to 56% of academic hospitals disclosed commercial prices for 5 common urologic procedures. 1 As of June 2022, only approximately 60% of hospitals disclosed commercial prices across 13 shoppable radiology services. 4 Second, the commercial prices for the same procedure vary widely across hospitals and within the same hospital.…”

“…Understanding the factors associated with price variations can enable better design of strategies to reduce health care costs.The Hospital Price Transparency rule, which enjoys bipartisan support, was implemented with the goals of facilitating comparison shopping for payers and patients, promoting price competition among hospitals, and eventually improving hospital care affordability. The information disclosed by some hospitals has enabled researchers such as Gul et al1 to answer many important questions that could not be examined before because of the lack of data. More research effort is warranted to provide rigorous evidence on whether price transparency influences health care costs, what structural issues in the market influence the effectiveness of price transparency, and how the behavior of various players in the health care market evolves in response to price transparency.…”

“…Researchers have analyzed the price data reported under the rule. Gul and colleagues examined the prices of 5 common urologic procedures disclosed by 153 academic hospitals. This commentary evaluates their findings in the context of the extant literature and raises 3 questions that require further debate and analysis.…”

“…Despite the steeper penalties, the compliance rate remains low. For example, Gul et al note that as of March 2022, only 29% to 56% of academic hospitals disclosed commercial prices for 5 common urologic procedures . As of June 2022, only approximately 60% of hospitals disclosed commercial prices across 13 shoppable radiology services …”