January 1, 2022, marks the one-year anniversary of the Hospital Price Transparency Rule, which, if you didn’t know, required all hospitals in the US to make their prices publicly available via a machine-readable file. With a year’s worth of lessons learned and data parsed, we thought there was no better way to celebrate the anniversary than by taking a deep dive into that very same data to uncover the most interesting, surprising, and down-right silly insights we could find.
Compliance Trends
On December 31, 2020, we sat anxiously at our computers waiting for the first machine-readable files to be published. Slowly but surely, days and weeks passed and hospitals began to publish their data. In little time, it became clear which hospitals were ahead of the game and which were struggling to find their footing. Fast-forward to December 2021, there are some clear compliance champions. Rising tall above them all is Lifepoint Health System, the health system with the most compliant machine-readable files by total beds. Looking at trends state-wide, we identified the most compliant states by percentage of hospitals with our highest compliance scores of 4 or 5 stars in every state. Across 3,651 hospitals in our database, the top five most compliant states are Minnesota (66.5%), Hawaii (64.3%), South Dakota (62.1%), Michigan (60.6%), and Maine (59%). The five least compliant states are North Dakota (28.8%), Texas (28.7%), Washington (27.4%), Louisiana (25.2%), and Colorado (24.3%).
The midwest is uniquely present in the top five most compliant states. Could health system consolidation be the contributing factor to these states’ smashing compliance success? In South Dakota, for example, you have two very large health systems, Sanford and Avera. The two systems account for over two-thirds of South Dakota’s 66 hospitals, and both systems posted meaningfully compliant machine-readable files. This is an example of just a few dominant health systems tipping a whole state’s market towards transparent prices. On the other hand, in states where the largest health systems didn’t begin a push towards compliance until later in the year, like Tennessee, Texas, and Illinois, the entire state often winds up at the bottom of our compliance list. As fines increase in 2022 and large health systems continue to come online with compliant data, we expect all states to look a bit more like South Dakota soon.
Rate Trends
Continuing with downright juicy stats, let’s look at pricing trends in the database, starting with some of our industry's most expensive items: drugs. The priciest drugs are interesting to look at purely to justify the urge to shake our heads at bogus, inflated costs (every drug below clocks in at an average blended rate of over $50,000 per unit with over 500 occurrences in our database). Something akin to schadenfreude happens when our assumptions are proven correct.
Similar to the cost of drugs, the going rate of an ICU bed is assumed to be equally bonkers. Let’s look at the per diem rates for an ICU bed by average negotiated rates for commercial plans (revenue codes 200-209).
While the difference between the highest and lowest average is $500 (If you’re the typical patient, you might read that difference and think, “not too bad!”), there’s an astoundingly wide spread between the 10th and 90th percentiles for the top five commercial payers.
When you take the initial $500 difference between payer averages and multiply it by the average days spent in the ICU for a critical inpatient stay (3.3 days), and you multiply that 100,000 patient admits (just a subset of the 4M+ ICU admits in the US each year), you’re already looking at a $165M spread in reimbursement between Aetna and UHC.
Volatility
Let’s turn to the most volatile prices by state. To find this, we first identified five common services that are frequently paid at standard fee schedules: Abdominal CTs, ER visits (level 5), ICU days (as defined above), knee meniscus repairs, and diagnostic colonoscopies. Our top five most volatile states were measured by a combined variance of commercial negotiated rates within these five services. Starting from highest to lowest, our most volatile pricing by state belonged to Texas, Arizona, South Carolina, California, and Tennessee.
At its core, price transparency is meant to empower patients to act as savvy consumers of healthcare. In markets with high volatility, patient education through clearly presented data can help patients save hundreds or thousands of dollars for identical services across town. A recent Wall Street Journal analysis using Turquoise Health data found a wide spread in pricing for ER Level 4, all within Boston for the same coverage plan. As price transparency data continues to roll out, savvy consumers (and proxy consumers, such as self-insured employers) will increasingly demand a stratified value proposition from providers of commoditized services.
Machine-Readable File Trends
Throughout the year, we’ve collected over 3,650 machine-readable files. Of all these files, 39.2% were CSV, 30.7% were XLS, 11.8% were JSON, 10.8% were API or “other,” (meaning the files weren’t available for download by the average user), 3.9% were TXT, and the final 3.5% were XML. (Since every normal person just closed this tab, we can now take an unusually long time to discuss file types).
CSV and Excel were the most common MRF file types our engineers came across. There is no file type stipulation provided by CMS, so these file format trends are organic. We recently recommended JSON as the best format to use as it cleanly retains parent-child relationships between rate objects and is easily digestible by engineers. In CMS’s forthcoming Transparency in Coverage requirement (the B-Side to the price transparency album), they’ve formally named JSON, XML, and YAML as acceptable file types, while explicitly ruling out Excel for being proprietary and having a row limit. It’s important to remember that machine-readable files are not meant to be the patient-friendly piece of the Hospital Price Transparency rule. The rule dictates that providers must publish both an MRF and a patient-friendly search tool on their websites. With that in mind, it’s not necessary for providers to publish their MRF in a patient-friendly file format if the price estimate tool is alive and well.
Topics We’re Frequently Asked About
When it comes to the most frequently asked questions we receive from journalists, academics, and fellow industry professionals, there is an overwhelming focus on a subset of specific shoppable services. Two categories stand out to us in particular: orthopedic surgeries and childbirth/delivery. On average (blending list, cash, and negotiated rates), the most expensive outpatient orthopedic surgeries were hip joint fusion, total hip arthroplasty, total artificial disc replacement for the spine, total knee arthroplasty, and insertion of an interlaminar stabilization device. It’s no coincidence that joint replacements were also the third most-searched service category on our site in 2021. While many joint replacements are performed on an inpatient basis, surgical trends continue to shift towards outpatient—and while outpatient rates are high, inpatient rates are often higher. Patients may stand to save thousands by clarifying cost and care setting options prior to surgery.
Of all the questions our employees are asked, even from some Turquoise family members, the most common is: How much does it cost to deliver a baby? The answers fall across the board. Every delivery scenario is different and depends on the health of the mother and child. For simplicity, we looked at the most affordable states to deliver a baby through normal vaginal delivery (which typically does not require an extended stay in the hospital). Iowa, Arkansas, New Hampshire, Illinois, and Georgia have the lowest average negotiated rates for commercial insurance.
Could the uncertainty of costs drive a site of service shift for expectant mothers? Since the pandemic, the number of home births has risen nearly 20% from more than 38,000 in 2019 to more than 45,000 in 2020, the highest growth level since 1990. As the pandemic continues to shape patient preferences for shoppable services, we’re curious if the cost of labor and delivery will decrease in more states as newer, potentially more attractive, methods of childbirth become readily available.
A quick aside to data analysts at home: The more data that is published, the better our industry’s ability to learn and grow. That’s why we share price transparency data with any interested parties. For any academic institutions interested in this data, we created this price transparency data set for researchers. The limited data set is totally free and we love seeing how different institutions are implementing data into their lessons or research.
What are consumers looking for?
If you didn’t know, anyone can head to our website and search the cost of any procedure contained within these hospital disclosures. This is free and will always be free, and we’re happy to see that a growing number of users are utilizing this tool. We know there is a long way to go before consumers can properly shop for healthcare at scale, but data and patient education can prepare consumers to anticipate the costs of care like never before.
Pulling analytics from our site traffic, we were curious to discover the most viewed procedures through December 2021. The top five most viewed (excluding the procedures linked on our homepage) were: 3D mammogram screening, ultrasound of abdomen, joint replacement (hip or knee), CT scan, and inpatient appendectomy.
It’s encouraging to see users learning about the costs of care at their local hospital and witnessing firsthand the price variation between insurance coverages. As future transparency legislation rolls out next year in the form of Transparency in Coverage and No Surprises, we’ll only continue to see an uptick in consumer tools for cost comparison. For example, we may see an increase of patients taking advantage of provisions in No Surprises that permit them to disregard insurance coverage when a shoppable service’s cash price is more affordable than the insured rate. Insurers and providers will be forced to reckon with all-inclusive cash prices that are significantly out of line with network discounts.
In addition to consumer search trends, we felt it was our responsibility to shine a light on a rather surprising, under-recognized statistic: the cost of beer at a hospital. At Santiam Hospital, the cost of a questionably cold Bud Light is $10.
After some digging, we realized that Santiam Hospital is located in Stayton, Oregon a mere 60 miles from Portland, Oregon. Portland, along with Denver, San Diego, and Seattle, is regarded as the birthplace of the modern craft brew renaissance. Maybe it’s something in the air in Oregon, but it would seem that beer in that state is a whole other kind of beverage—even in a hospital. If you're wondering about the taste, so are we. To try the cheapest most expensive beer on the west coast, stop by Santiam and let them know Turquoise sent you.
Is there more you’d like to know? Send us an email! 2021 was a landmark year for the future of consumerization in healthcare, for our company, and for all of us who nerd out on healthcare legislation. Looking towards 2022, we plan to trend the New Year’s disclosure against our 2021 data. We’ll continue to look for nuanced and surprising insights into healthcare reimbursement. If you’re a Turquoise customer, you already receive updates on new disclosure data. If you want to join in on all the data fun, sign up for our newsletter or laugh with us on social media.
From our team to yours, we wish you a happy, healthy, and transparent New Year!