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Table 1.  Characteristics of State-Sponsored Price Transparency Initiatives for Otolaryngologic Procedures in 2019
Characteristics of State-Sponsored Price Transparency Initiatives for Otolaryngologic Procedures in 2019
Table 2.  Cost of Otolaryngologic Procedures Included in State-Sponsored Price Transparency Initiatives
Cost of Otolaryngologic Procedures Included in State-Sponsored Price Transparency Initiatives
1.
Mehrotra  A, Chernew  ME, Sinaiko  AD.  Promise and reality of price transparency.  N Engl J Med. 2018;378(14):1348-1354. doi:10.1056/NEJMhpr1715229PubMedGoogle ScholarCrossref
2.
Kullgren  JT, Duey  KA, Werner  RM.  A census of state health care price transparency websites.  JAMA. 2013;309(23):2437-2438. doi:10.1001/jama.2013.6557PubMedGoogle ScholarCrossref
3.
Mehrotra  A, Brannen  T, Sinaiko  AD.  Use patterns of a state health care price transparency web site: what do patients shop for?  Inquiry. 2014;51:51.PubMedGoogle Scholar
4.
Cutler  D, Dafny  L.  Designing transparency systems for medical care prices.  N Engl J Med. 2011;364(10):894-895. doi:10.1056/NEJMp1100540PubMedGoogle ScholarCrossref
5.
Appleby  J. Need a medical procedure? pick the right provider and get cash back. https://khn.org/news/need-a-medical-procedure-pick-the-right-provider-and-get-cash-back/. Accessed July 21, 2019.
6.
Move  IE. Hospital groups sue Trump administration over price transparency rule. https://khn.org/morning-breakout/in-expected-move-hospital-groups-sue-trump-administration-over-price-transparency-rule/. Accessed July 21, 2019.
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Research Letter
March 5, 2020

State-Sponsored Price Transparency Initiatives for Otolaryngologic Procedures in 2019

Author Affiliations
  • 1The Warren Alpert Medical School of Brown University, Providence, Rhode Island
  • 2Massachusetts Eye and Ear, Boston, Massachusetts
  • 3Harvard Business School, Boston, Massachusetts
  • 4Department of Otolaryngology, Harvard Medical School, Boston, Massachusetts
JAMA Otolaryngol Head Neck Surg. Published online March 5, 2020. doi:10.1001/jamaoto.2019.4861

Many recent initiatives to reduce health care spending have focused on price transparency (PT). Given that health care prices vary substantially and there is no clear association between price and quality, PT may enable consumers to seek lower-cost services and stimulate competition between clinicians.1 Furthermore, PT may serve as an important means of facilitating access to affordable care as more Americans subscribe to high-deductible plans.1,2

State-sponsored initiatives are among the most promising means of facilitating PT. States can obtain comprehensive market data to provide all patients with robust price information. By contrast, price information reported by health plans, consumer groups, and clinicians is more limited in scope and audience (eg, health plan subscribers).2 Little is known about how these initiatives may inform the care of patients seeking otolaryngologic care. We therefore sought to characterize the information provided by state-sponsored PT websites for outpatient otolaryngologic procedures.

Methods

We conducted a cross-sectional analysis of the 8 state-sponsored health care PT websites reporting cost data from all-payer claims databases (Colorado, Florida, Massachusetts, Maryland, Maine, New Hampshire, Virginia, and Washington) as of July 2019. We identified initiatives, including otolaryngologic procedures, and categorized each initiative by care episode type (procedure/bundle [bundle includes routine periprocedural care]) and the availability of the following information: nonfinancial value metrics, out-of-pocket (OOP) costs, price by insurer, and price by clinician organization. Next, we extracted all available price data for all otolaryngologic procedures/bundles included in each initiative.

We further examined pricing in New Hampshire, which offers the most detailed pricing information among the states included.3 For each bundle, we extracted prices for all clinician-insurer combinations (including no insurer) and the state-determined precision (low/medium/high) of each price.

We used descriptive statistics to characterize price variation for procedures included in state-sponsored initiatives. We additionally analyzed the precision of price estimates and pricing variation by insurance status (insured/uninsured) in New Hampshire. Data were extracted between July and August 2019.

Results

As of August 2019, half (4/8) of state-sponsored price transparency websites included information on otolaryngologic procedures (Table 1). There were few otolaryngologic procedures included overall (range, 1-6 procedures per state). Only New Hampshire provided OOP costs (although only for uninsured patients) and pricing by insurer. Two states (New Hampshire/Colorado) reported pricing by clinician organization.

There was price variation for all procedures/bundles (Table 2). The median ratio of maximum to minimum price for a given procedure/bundle was 3.2; price ratios ranged between 1.5 ($158-$230 per flexible diagnostic laryngoscopy; Florida) to 5.0 ($1690-$8510 per tonsillectomy; Colorado). In New Hampshire, bundle prices were substantially higher for uninsured patients (Table 2). The precision of price estimates was overall low across procedures (nasal endoscopy: 31/69 prices [44.9%]; flexible diagnostic laryngoscopy: 32/69 prices [46.4%]; tonsillectomy with adenoidectomy: 9/12 prices [75.0%]).

Discussion

Our study demonstrates that state-sponsored PT initiatives currently provide limited information to support decision-making by patients seeking otolaryngologic care. Half the initiatives included otolaryngologic procedures; those that did included few procedures and provided limited information without insurer/clinician-specific pricing, OOP costs, and nonfinancial value metrics. The available pricing information revealed considerable variation for all procedures.

There are 2 measures states may consider to improve the use of PT initiatives for patients. First, states could improve the quality of information available online. In particular, patients may benefit from information on copayments, bundle costs, clinician quality, or patient experience.4 Second, states could promote patient awareness of and engagement with available PT tools. Prior research has revealed that just 1% of New Hampshire residents sought information on tonsillectomy pricing between 2011 and 2013.3 However, New Hampshire was able to increase site visits via an advertising campaign, a rewards program, or by implementing annual deductibles for state employees,5 strategies that other states could consider adopting. Lessons learned from state-sponsored PT initiatives are especially relevant as the federal government seeks to mandate PT by hospitals and insurers nationwide, although hospital groups have filed a lawsuit to block the proposed reforms.6

Our study is limited by the cross-sectional nature of analysis. The breadth and quality of pricing information available for otolaryngologic services will evolve. Further research is necessary to understand how pricing information influences the decision-making of patients seeking otolaryngologic care.

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Article Information

Corresponding Author: Vinay K. Rathi, MD, Mass Eye & Ear Infirmary, 243 Charles St, Boston, MA 02114 (vinay_rathi@meei.harvard.edu).

Published Online: March 5, 2020. doi:10.1001/jamaoto.2019.4861

Author Contributions: Mr Kondamuri had full access to all of the data in the study and takes responsibility for the integrity of the data and the accuracy of the data analysis. Mr Kondamuri and Dr Suresh are co–first authors and contributed equally to this work.

Concept and design: Rathi, Kozin, Naunheim, Xiao, Varvares.

Acquisition, analysis, or interpretation of data: Kondamuri, Suresh, Rathi, Naunheim.

Drafting of the manuscript: Kondamuri, Suresh, Rathi, Kozin, Naunheim.

Critical revision of the manuscript for important intellectual content: All authors.

Statistical analysis: Kondamuri.

Administrative, technical, or material support: Kozin, Naunheim, Xiao.

Supervision: Rathi, Kozin, Naunheim, Varvares.

Conflict of Interest Disclosures: None reported.

Disclaimer: The authors assume full responsibility for the accuracy and completeness of the ideas presented.

References
1.
Mehrotra  A, Chernew  ME, Sinaiko  AD.  Promise and reality of price transparency.  N Engl J Med. 2018;378(14):1348-1354. doi:10.1056/NEJMhpr1715229PubMedGoogle ScholarCrossref
2.
Kullgren  JT, Duey  KA, Werner  RM.  A census of state health care price transparency websites.  JAMA. 2013;309(23):2437-2438. doi:10.1001/jama.2013.6557PubMedGoogle ScholarCrossref
3.
Mehrotra  A, Brannen  T, Sinaiko  AD.  Use patterns of a state health care price transparency web site: what do patients shop for?  Inquiry. 2014;51:51.PubMedGoogle Scholar
4.
Cutler  D, Dafny  L.  Designing transparency systems for medical care prices.  N Engl J Med. 2011;364(10):894-895. doi:10.1056/NEJMp1100540PubMedGoogle ScholarCrossref
5.
Appleby  J. Need a medical procedure? pick the right provider and get cash back. https://khn.org/news/need-a-medical-procedure-pick-the-right-provider-and-get-cash-back/. Accessed July 21, 2019.
6.
Move  IE. Hospital groups sue Trump administration over price transparency rule. https://khn.org/morning-breakout/in-expected-move-hospital-groups-sue-trump-administration-over-price-transparency-rule/. Accessed July 21, 2019.
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