The end of health price secrecy may be starting in Miami

May 21, 2013

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When Medicare released thousands of health-care prices this month, one of the biggest criticisms was that these figures didn't represent what patients actually paid.

Medicare, for example, pays hospitals on a set fee schedule, regardless of their prices. Health insurance plans typically negotiate a lower rate with a hospital than the sticker price that showed up in the new data. Those prices still remain secret -- but that may change.

Spurred by the release of the Medicare data, the chief executive of Mt. Sinai Medical Center in Miami has now pledged to release those negotiated rates that tend to be kept secret. Via MedCity News:

Steve Sonenreich, chief executive of Mount Sinai Medical Center in Miami Beach, made a public pledge Monday to divulge the contractual rates the hospital pays private insurers for diagnoses and treatments.

"We will post our prices relative to Blue Cross, and Aetna, our contractual prices, and we'll challenge Baptist and the other systems in the community to do the same,'' said Sonenreich, who made his pledge during a studio interview on WLRN 91.3-FM with host Tom Hudson.

This is a pretty big step for a hospital to take. Typically, hospitals and health plans closely guard their negotiated rates as a competitive advantage. A hospital doesn't want its competitor down the street to know it's getting paid a lot more by an insurance company for the exact same procedure. Likewise, health plans don't want their competition to know when they've gotten a low rate with a provider.

One hospital promising to release its rate is by no means a sea change, and there's still a lot of distance between one hospital promising to release its contracted rates and those in the rest of the country. Getting other hospitals on board will near certainly prove a difficult task. In a perhaps telling example,  another local hospital CEO, Brian Keeley of Baptist Health South Florida, has already demurred from matching Mount Sinai's pledge.

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Brad Plumer · May 21, 2013