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Price Standards

Controlling Costs

If we are to control health care costs -- and we must -- we first need to know what our costs are, and what we are getting for our money. But doing so is difficult. Beyond our insurance premiums and co-payments, none of us has a clue what we actually pay for health care.

The problem is that while a great deal of our spending is going to truly valuable treatments, too much is not. As a result, health care costs are higher than they need to be.

Price transparency requires gathering information from insurers and payers to provide relevant information to consumers. Wide participation is important, because a large body of information is needed to be able to draw valid price comparisons on specific treatments, hospitals, and doctors.

Medicare Costs

To create an immediate critical mass, the Centers for Medicare & Medicaid Services (CMS) has posted the payment information for common procedures. The data represents hospital admissions, ambulatory surgery centers and also common hospital outpatient and physician services. The information is categorized by state and county and includes a range of prices, the national average payment for the procedure, and, in the case of hospitals, by the number of cases the facility has handled.

At the same time, insurers and payers are working to develop standards so that consumers can get a clearer idea of their overall costs of treatment for an episode of care - physicians, hospital services, lab tests, pharmacy, rehabilitation, etc.