Health insurance consumers are looking to comparison shop for medical procedures, which seem to be priced in a frustratingly arbitrary manner. Typically medical procedure costs have been kept under wraps, although the internet has started to make this information more readily available, allowing consumers to compare prices and even evaluate affordable alternatives.
Patients rarely receive information on costs before treatment, and even the insurers themselves do not know what other companies are paying for a given procedure. On average doctors have somewhere between five and 100 different reimbursement rates for the same procedure. Worse, a hospital with multiple geographic locations may have upwards of 150 rates for a single procedure.
Of the 50 states, 32 require that hospitals provide specific pricing information to the public. Consumers do not often find this information useful, however, because the hospital does not have to disclose the discounted rates they contractually provide to insurers, which can vary greatly. In essence patients are less interested in what the hospital charges, and more interested in the bottom line cost to them once the discount has been applied.
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As someone in the insurance industry, you should know better than anyone else that hospital prices are not set "arbitrarily". Insurance companies wield most of the power in the price-setting game. Hospitals are forced to price procedures and supplies at rates that will allow them to see a decent margin so that they can continue operating and serving the community. This is made more difficult by insurance companies negotiating (often unfair) reimbursement terms for hospitals. Perhaps if more insurance companies were engaged in the effort to make prices transparent to consumers, this wouldn't be such a teeth-pulling endeavor. It's unreasonable and inaccurate to throw all of the blame onto hospitals.
Of course, you are right when you say that "hospital prices are not set "arbitrarily". But to consumers "medical prodedures seem to be priced in a frustratingly arbitrary manner". What I'm talking about is the lack of cost transparency to the consumer. Thank's for your comment.