Why is cost so obscure in healthcare?

I am embarrassed.  I am a specialist taking care of patients with inflammatory bowel diseases, which include Crohn’s disease and ulcerative colitis. I spend more than half of my time at work related to research regarding the benefits and risks of treatment options for these diseases.  Specifically, I aim to translate the vast medical literature published on this topic into tools for patients (and their parents) to help them better understand the complicated trade-offs that need to be made around treatment decisions.

Why complicated?  Well, a typical conversation during a far too short office visit entails explaining to a patient that my recommendation is to take a combination of medications to treat their disease.  If they don’t take them, they have a significant risk of their disease progressing from an illness causing diarrhea, rectal bleeding and abdominal pain, to a problem that could necessitate multiple intestinal surgeries and even lead to an ostomy requiring a bag to be worn on their abdomen to collect stool.  Seems simple enough — “I’ll take the meds!” But, then I tell them that these medications, although can be very effective, don’t work in everyone.  Oh, and also — they might lead to serious life-threatening infections including tuberculosis… and cancer.  Now I just made them scared that the treatment could be worse than their disease.

But this isn’t why I’m embarrassed.  I think I’ve become fairly adept at explaining the trade-offs to them, and have even developed tools through my research to help them understand (and not be scared) that these medications can be extremely beneficial and be used safely.  I believe that between my research and my institution’s dedication to the field of Shared Decision Making that I’m typically respectful that a choice for treatment should not be paternalistic but be “shared” with the patient.

Until recently I thought I was doing a pretty good job at this. However, I’ve had an awakening that I’ve been ignoring an entire aspect of the patient’s decision.  The aspect of cost.

I of course understand that patients pay to see me in the office, pay for their colonoscopy, lab tests, their MRI scans and medications, but I have no idea how much.  Furthermore, not everybody pays the same depending on their insurance company, co-payment plan, co-insurance, deductible, and other variables. Some patients may agree 100% with the treatments and tests recommended to them, but can’t pay either at all, or without giving up something they would far rather spend their hard-earned money on.

I’m embarrassed because I haven’t focused on this problem for patients, but even more so, because when patients ask me how much my recommended plan will cost, I don’t know.  My institution does have a fairly slick website to estimate how much a patient will owe based on a set of variables, but to be honest, I’ve never suggested a patient check this. Even if I did, it’s not refined enough to compare the cost of specific treatment plans against each other.

Imagine going to a restaurant, asking the waiter for a recommendation for “what’s good today” and then finding out that there are no prices on the menu.  You sheepishly ask how much it costs – and the waiter responds, “I have no idea, it could be free – it could be $2500, it depends.”  But, they suggest that it will all become clear when the bill comes… in about three months.  But don’t worry – it will be delicious.   I’d walk out.

Why is cost so obscure in healthcare?

Shared decision-making has been about helping patients understand the trade-offs between treatment decisions in which there is equipoise (six in one, half-dozen in the other).  Without question this is a good starting point.  However, cost, the most practical, realistic and tangible part of a decision AFTER they leave the office is oftentimes ignored.

We’re not just talking the costs of the procedure, surgery or medication at that moment, but the cost over months to years when in comes to chronic diseases like Crohn’s disease, ulcerative colitis, diabetes or heart disease. Decision aids have historically delivered evidence-based data to assist patients in making a preference-based decision regarding treatment options, regardless of cost.  I believe we should work on techniques to incorporate cost of care as an attribute for future decision tools.

Perhaps I’m the only one ignoring short and long-term costs in my discussion about treatment options with patients, but I suspect that I am not.  I don’t know how to fix this problem, but I hope that we can start to address it.  You wouldn’t buy a car, a new pair of jeans, plan a vacation or order off of a menu without seeing the price.  So, why does it have to be so obscure in healthcare?

I’m not suggesting it needs to be free – it just needs to be clear.  A knowledgeable patient is an engaged patient, and it is to no one’s benefit for them to “walk out” on their health.

Corey A. Siegel is Director of the Inflammatory Bowel Disease (IBD) Center, Dartmouth-Hitchcock Medical Center and Associate Professor of Medicine, Dartmouth Institute for Health Policy and Clinical Practice.  He blogs at Engaging the Patient.

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  • Allison Falin

    While I don’t use it in my daily career, I am ever increasingly grateful that I chose to get my Masters in Org. Management prior to getting my MSN, FNP. I am able to look at cost analysis and coding and figure this stuff out. My IT background in healthcare has been invaluable because I was forced to learn how to query databases and crunch those numbers. It is my opinion that ALL healthcare providers should be required to take a Finance of Healthcare course while in their field of study and fully understand how the business aspect works. Only then can we truly inform patients.

    • Bonnie

      The clerks at the grocery store and the waiters at a restaurant and the mechanics at the auto repair shop don’t need a special post-graduate degree to tell us how much this, that or the other costs. Why should doctors?

      My husband’s employer dropped their insurance last year, so right now we’re cash patients. Excuse me for shouting, I’m not usually a very shouty person, but WHY IS IT SO HARD to find out what anything is going to cost before we sign on the dotted line that we’ll have it and that we guarantee that we’ll pay for it?

      Let’s say you needed you car for work, but when it broke down and was towed in to the nearest garage they wouldn’t tell you what they were going to charge you to fix it, couldn’t even give you an estimate, just “leave it to us and we’ll send you a bill for anywhere from $250 to $25,000 in a couple of weeks, and y’all might lose your house if you don’t pay it.”


      EDIT: I’m not actually SHOUTING at you personally, Allison, just at “the system”. I actually commend you for your education and obvious attempts to help, I just needed to let off some steam, my apologies :-/

  • http://www.facebook.com/profile.php?id=100000077801405 Jay B. Ham

    Being a little cynical here… how long before a physician or health organization is sued for NOT talking about cost or not using a less expensive alternative? Ie. a chest pain visit to the ER with an observation admit to rule out a heart attack could cost more than $10,000 or less than $1000 depending on how you and the patient wish to proceed (and insurance coverage). If the patient doesn’t have any idea of cost ahead of time, I think they’d be pretty pissed off to find out they could have saved $9000.

  • James deMaine

    Billing often has little to do with actual costs. Time magazine devoted an entire issue to this problem: http://www.time.com/time/magazine/article/0,9171,2136864,00.html

    Your are so right! The patient has no mechanism to “shop around” for the best price. It’s all opaque and depends on what the insurance company or Medicare is willing to pay.

    Even Forbes magazine is demanding price transparency: http://www.forbes.com/sites/realspin/2013/03/20/to-bring-healthcare-prices-down-consumers-must-demand-price-transparency/

    It’s a very leaky bucket of health care dollars simply being sprinkled around. See my take on this: http://www.endoflifeblog.com/2012/04/health-care-costs-leaky-bucket.html

    Let’s hope we get real reform and transparency so health care charges at least have some correlation with true health care costs.

    • Glenn

      Thank you for those links, Dr. deMaine, I will read them later today. I have read the Time Magazine piece, but not the others. My family has a high deductible “catastrophic” insurance plan, so we self-pay for almost everything out of our set-aside savings. We are happy to do so, this is our preferred method of managing our healthcare needs and expenses, but it gets so frustrating when doctors cannot tell us before-hand what certain things will cost.

      Ideally we’d like to manage our everyday healthcare like we do our everyday home or car maintenance & repair, but it’s a little hard to do a cost-benefit analysis when no one will tell you the cost beforehand.

  • AnonRD

    Last year my daughter had a cold followed by months of fluid in her ears. It got so bad, she could barely hear anymore. After exhausting all the conservative management options, the ENT suggested tubes. Being a child, he recommended she be put under for the 20 minute procedure. Imagine my shock when I got the bill: $8500! The bulk of the cost, $5500, was for the operating room. Our PPO “covered” 100% – after we paid the $2500 deductible. This month I will make the last $170 payment.

    When I told the ENT how much we had to end up paying out of pocket, he was horrified and apologetic. Even he reiterated that it was only a 20 minute procedure.

    Fortunately, the procedure was a success, but the tubes will of course fall out eventually and the ENT thinks my daughter has eustacian tube dysfunction and may require them again in the future. Next time we will definitely be discussing alternatives to general anesthesia.

    • southerndoc1

      Complain to your insurer. If they’re approving a 5.5K OR charge, they’re miserable stewards of your health care premiums.

  • JPedersenB

    Bravo! This is something that needs immediate attention. No one should have to ponder financial ruin when faced with proposed medical treatment!!
    (I have always wondered why no one can even estimate charges before the recommended care but there doesn’t seem to be a problem after the services are rendered. Perhaps, one needs to talk to the billing clerk first…)

  • http://www.facebook.com/inflammasome Matthew Bowdish

    The costs are not transparent for a variety of reasons, but removing the medical consumer from cost pressures via third party payers is probably the most important one. That’s why as we move towards nationalized health care the ultimate outcomes will be runaway costs and eventual rationing.

  • Noni

    Transparency is key! And there is none! As a patient who is also a physician I experienced this once recently. I asked how much an elective procedure would cost. “It depends on how the doc codes it.” Ok, what are the rates for the various codes? “I’m not sure, that will be up to the doc.” So I need to have the procedure without knowing what it will cost and hope for the best? “The doctor will let you know.” Outrageous!

    • Glenn

      “So I need to have the procedure without knowing what it will cost and hope for the best?”

      Pelosi-ism: “We have to pass the bill to see what’s in it”!

  • http://www.mightycasey.com/ MightyCasey

    Uwe Reinhardt’s “chaos behind a veil of secrecy” on the hoof. The real Great and Powerful Oz in healthcare (who’s really just a carny barker behind a curtain) is pricing/cost.

    Simply asking “how much is that?” is a grassroots move that could help shift the needle. Patients need to start doing exactly that. I’ve been doing it since I became one of the legion of uninsured in January ’09, thanks to cancer history and being, uh, a vintage model.

    If we just start asking “how much is that?” when making healthcare decisions, we can lift that veil of secrecy for everyone: patients, docs, nurses, all of us.

    • Glenn

      Great suggestion. Those of us self-pay “outside the [insurance] system” customers are really hampered when doctors cannot or will not tell us ahead of time what our various options might cost. We have three dogs, all “vintage models” entering their high-maintenance years, and have often joked that we wished people-doctors could be as transparent about costs ahead of time as our vet is.

      • http://www.mightycasey.com/ MightyCasey

        That same DVM/MD observation is made frequently in the precincts I frequent (the frontiers of participatory medicine and patient activation) – what’s needed is more MDs like Corey Siegel waking up and going “wait … what?” when it comes to knowing how to answer how-much-is-that questions. Laughable that medicine, which has talked out of both sides of its mouth for so long – one side saying “it’s a calling” while the other side talks up revenue building ideas like an MLM marketer – still has no idea what its products and services cost its end users.

  • Keith Chan

    Good article!

    Given how impossible it would be to know exactly how much it would cost per patient/insurance permutation, perhaps we can at least memorize the costs to the largest provider — Medicare. I know that this would be discordant with the actual costs/reimbursement to any non-Medicare patient, but at least this is a comparative standard (hey we use this for all cost-effectiveness papers) AND it would help provide data on what a universal health care system would look like.

    I used to work for a large HMO in Northern California, and the good thing about this self-contained network is that for every patient, I can just click on a little “$” icon next to every order and see exactly what it costs/covers for each patient’s insurance plan. So we were able to decide what next steps to do now vs later given the costs.

    • Glenn

      “perhaps we can at least memorize the costs to the largest provider — Medicare”

      That would do nothing for the increasing number of people who are handling their own healthcare costs, though. Unless the provider would then allow the cash payer to pay the Medicare price.

  • http://www.facebook.com/lizarye Lisa Rye Ernst

    THANK YOU. Please take this idea and run with it! We need specialists to help us navigate health care bills and insurance benefits just like we do for taxes. It’s out of control!

  • meyati

    Some of these specialists can’t even tell you much about the surgery. I was more than willing to turn down a cancer surgery-we did our own research on what we could-minimum of $35,000 to keep my throat open, and a strong possibility that this would be a life time care, a minimum of $6,000 a month for nursing home+ meds, etc. Then they found out that I wouldn’t have any bone on the right side of my face. Finally the doctor said that it would take about a year or more before I got a prosthetic face, the surgery would remove the bone, nose, eye. My daughter is a speech pathologist-so we had an idea of the initial therapy cost, Maybe they don’t know the costs-but it seems that they could tell you more than we’ll get you an eye patch and everything will be OK. By the way, I fired him loudly and rudely. I tried to be polite by requesting a new doctor- and the clinic kept referring me to the chaplain or the Quality of Life Counselor. The clinic head said that I had a new doctor- and I waited and waited- then stormed up and told them that if I had a new doctor that I should have the name of the doctor and an appointment. I like the new one fine- just because he isn’t the old one. But he listened to me about my concern of costs-and a fear that I’d be kicked out on the street because nobody knew how much it would cost. Ear-Shunts–How in the world is a person supposed to know what that costs? One of the problems in medicine is that everything is supposed to be in a hurry-HOW DO YOU SHOP OR MAKE DEALS WHEN YOUR CHILD IS IN PAIN-AND EVERYDAY CAN CAUSE MORE DAMAGE? ALSO BILLING SAYS THAT IT DEPENDS ON HOW THE DOCTOR”S STAFF WRITES UP THE BILL–NOBODY KNOWS NOTHING- When part of my nose was lopped off-I didn’t know if my co-pay would be $50 or almost $500-one or the other-It seems that they would have an idea of what the bottom line is-and I’m talking about the billing office. If you have time-talk to the surgeon’s billing clerk- call the stupid hospital or day surgery and ask-Also- a person can go to the state Health office about this.

  • http://www.facebook.com/shirie.leng Shirie Leng

    The patient is a reluctant consumer in the health care markeplace. They have to buy something, but they don’t know what they need, what the results of their purchase will be, what the guy down the street is selling the same thing for, or what kind of deal they’re getting. That’s why health care should not be market-driven

    • Bonnie

      “That’s why health care should not be market-driven”


      If not market-driven, then what? And please don’t say government-driven… I am just old enough to remember spending almost the entire summer of ’79 waiting in gas lines after Jimmy Carter decided it was the government’s job to fix gas prices. I don’t want to have to bring a folding chair and a cut lunch to go wait in line 7 hours to get a blood test.

      Honestly, I trust the market way more than I do the government when it comes to pricing.

    • Noni

      Respectfully disagree. Once there’s competition between hospitals, physicians, labs, etc cost will come way way down. If hospital x says they’ll do a lap chole for 15K while hospital y says they’ll do it for 4, patients will ultimately help bring prices down.

      For my child’s recent hospitalization every single dose of every single medication cost $88. WTF does this mean? Why should I pay $88 for every medication? Why shouldn’t I be charged what they actually cost? We so desperately need transparency!

  • http://www.facebook.com/beau.ellenbecker Beau Ellenbecker

    I just wrote a blog entry last week almost identical to this…

  • katerinahurd

    How is it possible that shared decision making for a choice of treatment is foreign to the cost of treatment agreed upon by the physician and patient?

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