New Hampshire posts health cost estimates online

A new Web site created by a partnership between two state agencies in New Hampshire is designed not only to give the state's residents cost estimates for many common medical procedures at hospitals in the state, but also to estimate how much consumers would pay out of pocket, and how much would be covered by their insurance.

The project by the New Hampshire Dept. of Insurance and the state's Dept. of Health and Human Services is the latest step in the movement to bring more transparency to health care costs. Numerous hospital associations, including New Hampshire's, post hospital cost information for the public, while some insurers post physician and hospital cost information on sites intended only for members.

New Hampshire believes it is the first state with a public site that allows consumers to know the cost of hospital care -- including physician charges, which are calculated but not broken out separately -- and their share of that cost. The Web site (link) is expected to be available in March.

The cost information is drawn from claims data. Since 2005, the state has required health plans and third-party administrators to submit claims data on all their members covered by policies issued in the state. Maine also has such a requirement, but it has not yet made that information available on a public Web site.

"I think it's a good start," said Palmer Jones, executive director of the New Hampshire Medical Society. "There's no question that everybody wants to learn more. How helpful will it be? It's still too early to tell, [but] I commend the state ... for trying to start this project."

Jones said physicians have concerns about the quality of the data used to feed the Web site because usually claims data have not been reliable sources to make good assumptions about cost of medical care.

Tyler Brannen, the New Hampshire Dept. of Insurance's health care statistician, said the Web site is constructed in a way that should protect against information that is misleading. He said the database includes a filter that knocks out the highest and lowest 5% of claims for a particular procedure. What's then posted is the median price of a procedure, including physician billings, lab fees and other costs.

Consumers will be able to select their insurance plan and a medical procedure from pull-down menus online, Brannen said. Then consumers can pick individual hospitals to find out the expected charge, and the expected consumer out-of-pocket cost.

The New Hampshire Hospital Assn. recently began its own Web site (link) that provides price information for any inpatient procedure.

The state's Web site is limited to only the most common procedures; the hospital association Web site does not list insurance information.

Mike Hill, president of the New Hampshire Hospital Assn., said that, while his members agree price transparency is necessary, in practice it has some unintended consequences because only three insurers represent more than 90% of the state's market share. "A lot of people believe that you can make some good assumptions that you can get a good idea of the differences in contracts between plans," Hill said. "That is a problem.

"We've already seen that where hospitals are saying [to insurers], 'We want the same deal they got.' "

Dept. of Insurance health policy analyst Leslie Ludtke said people have a right to know the cost of what they're paying for, regardless of the impact that it has on contracts.

"The people are paying, and it's not fair to withhold information," Ludtke said. "Once you decide people need the information, you give it to them."

The New Hampshire Web site does not include fees and out-of-pocket costs listed by individual physicians, although Ludtke said that might be considered in the future.

Meanwhile, some experts question whether patients really will -- or should -- use price information to make their medical decisions in the first place. Michael Fleischman, a principal consultant with Atlanta-based health care consulting firm Gates, Moore and Co., said that often patients rely on the recommendation of their physician regardless of the price.

"Health care is not like shopping for tires," Fleischman said.

The AMA has policy calling on physicians and others in the health care system to post their fees. But it also says such efforts are ineffective without health plans also revealing what they reimburse doctors and others. The AMA House of Delegates approved a report at its 2006 Annual Meeting to closely monitor any transparency initiatives by health plans, to ensure that plans provide accurate information and to assess the impact of those initiatives on physicians.