May 25, 2009

Price Transparency in Boston

In a time when tightening belts and pinching pennies has become especially important, patients too often pay exorbitant amounts—enough to bankrupt two million American families a year—on medical care they may not even need.   

Patients will spend hundreds of dollars on a medication they are prescribed, even when a generic version is available that contains the exact same stuff and is 90% cheaper. Patients might pay thousands of dollars for an MRI, even when its results are unlikely to be informative. According to the Congression Budget Office, tests and treatments that do not improve health outcomes add up to an impressive total: $700 billion each year, the same amount we have spent on the entire Iraq War.

One of the reasons for this is painfully simple. Information on the prices patients face is rarely available to doctors when they are deciding which tests and treatments will go on the bill. A 2003 American Medical Association study showed that fewer than one in five doctors understands how much their patients pay for care.

In Boston, we are piloting a project called Costs of Care, that will harness information technology to give doctors information on the prices their patients face at the critical moment when medical decisions are being made.  

We believe that doctors who are cost-aware will be less likely to inflate medical bills unnecessarily. You can support our efforts by becoming a fan on facebook or by following us on twitter.