In 2006, California was among the first states nationwide to require hospitals to publish average charges for some of the most common procedures. The state Office of Statewide Health Planning and Development lists this information for specific hospitals online.
The trouble is that no one actually pays these billed charges, not even the uninsured. Insured patients would be responsible for a reduced price negotiated by their insurer, and the discount would vary based on the company. David Byrnes, a spokesman for the state planning office, said his agency doesn't have the authority to request additional hospital data beyond the billed charges.
Dario Frommer, former state Assembly majority leader and a lawyer in Los Angeles, sponsored the bill requiring hospitals to disclose more cost information. At the time, he expected it to help consumers shop for the best hospital prices and not be shocked afterward by huge medical bills. "There may be some bad apples, but my experience is hospitals are trying to conform with the law and make information available," Frommer said.
Insurers have tried to come to the aid of patients by rolling out new online tools allowing members to get a range of prices among network providers. Other sites such as fairhealth.org and healthcarebluebook.com offer consumers average prices by ZIP Code for many common services and tips on managing out-of-pocket costs.
Nonprofit Blue Shield of California launched a new "treatment cost estimator" on its website last month, accessible to its members with preferred-provider plans. It shows, for instance, that a shoulder arthroscopy at three specific hospitals in Northern California varies in price from $7,523 to $11,534 at the company's negotiated rates; a hip replacement ranged from $18,306 to $45,766 at three Los Angeles-area hospitals.
However, the detailed data with specific names of hospitals or clinics can't be shared with the general public under the terms of most contracts between insurers and medical providers. California Insurance Commissioner Dave Jones said he would like more consumers to have access to that pricing information. "Consumers don't really know the health-cost consequences of their decisions," Jones said, "and they have more of their money at stake."
Some California lawmakers say hospitals can do more. State Sen. Ted Lieu (D-Torrance) has filed a bill that would require hospitals to disclose all potential charges, including all physician and lab fees, in certain cases. The legislation is scheduled for a second Senate hearing later this month.
"The burden should be on the hospital, not the patient, to figure this out," Lieu said. "Patients should have the right information so they can choose to go forward or not."
Both the California Medical Assn., which represents physicians, and the state hospital trade group have concerns about the legislation. For one, they say, hospitals shouldn't be responsible for supplying physician charges because doctors are independent contractors and can't be employed by hospitals under state law.
The physicians' group calls the legislation an "unworkable solution" and says insurance companies are in a better position to assist members with questions about out-of-pocket costs. "We have to ask whether we want physicians focusing on paperwork or treating patients," said Molly Weedn, spokeswoman for the California Medical Assn.
In January, Anthem Blue Cross rolled out a service in Ventura, Orange and San Diego counties in which it calls members who are referred for an MRI, CT scan or other imaging test and informs them of the lowest-cost option in their area. Anthem said it started the service because the cost for these scans can vary from $350 at outpatient centers to more than $2,000 at hospitals with little difference in quality.
Dranitzke sought help from Anthem, his insurer, but representatives there only advised him whether a service was covered or not by his plan.
He decided to call around for the best prices. His family of four has a $3,500 deductible, and his out-of-pocket costs can reach nearly $12,000.
Healthcare policy experts say that such price-shopping could be a brake on rising healthcare costs, by forcing medical providers to be competitive. But as Dranitzke found, it's not like shopping for the best deal on a set of tires.
"If I could have saved 10% off the cost, that would have been a big chunk of change," he said. "But it's nearly impossible to figure this out."