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On Jan. 1, a new law came into effect that requires hospitals in the United States to post the prices of all of their offered services and procedures online. This law, called the Inpatient Prospective Payment System rule, was designed with the intention of increasing medical bill transparency for patients. Some worry, however, that the high price-tag that comes with most procedures will confuse and turn patients away from seeking medical care. This could then force hospitals to decrease product quality to match competitive prices.

The prices listed on hospital websites will almost never be representative of the actual out-of-pocket cost for patients. Factors such as an individual’s health insurance policy, deductibles, co-pays, and even what time of year it is all impact hospital costs, none of which are taken into consideration in the newly listed prices. In other words, each individual patient’s circumstances are unique, so the price they will have to pay cannot be accurately estimated by a single price.

Steve Slessor, CEO of the Buchanan County Health Center in Iowa, confirms this, noting that there is usually a completely different answer to the questions “What does it cost?” and “What is my out of pocket expense?” and that the newly published prices are completely unable to estimate what costs any given individual will have to pay.

With hospitals now in competition with one another, they may be forced to reduce costs and incentivize patients to choose their facility as the least expensive option. This could cause pricier hospitals to decrease quality of their medical tools to save money, which would lower healthcare quality along with service costs. Sharona Hoffman, co-director of the Law-Medicine Center at Ohio’s Case Western Reserve University, shares this concern: “So are hospitals going to have an incentive to make their prices look very low, are they going to start using cheaper devices in surgeries?

All in all, this new hospital pricing transparency regulation may end up being a well-intended law that confuses patients more than it helps them. Hopefully in the future, legislators implement a system that increases pricing transparency that is representative of the actual out-of-pocket expenses for patients.

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