Your surgery could cost $50,000 or $100,000, depending on which hospital you pick

The list prices for an MRI of the lower back range from about $1,580 to nearly $9,000 at Long Island hospitals. A knee or hip replacement comes with a sticker price varying from less than $49,000 to more than $101,000, depending on the hospital. A common surgery called spinal fusion is listed for amounts ranging from about $95,600 to $221,200.

All that information and more is now online, thanks to federal rules that require hospitals and insurance companies to publish detailed information about health care prices. The information allows cost-conscious patients to comparison-shop for surgeries the way travelers seek out the best prices for flights.

Experts say the federal rules, which took effect for hospitals last year and insurance companies this month, are vital for consumers with inflation taking an ever-bigger bite out of families’ budgets — and prices for some medical procedures varying by tens of thousands of dollars, depending on the facility and insurer. 

The rules are intended to help bring down the prices that contribute to the high cost of coverage. 

“As people learn that they can shop around for this, it will become more prevalent, just like today, it’s so normal for any of us to use Hotels.com or Google Flights,” said Marcus Dorstel, vice president of operations at health tech startup Turquoise Health, which posts detailed hospital data on its website. The company expects to release a consumer-friendly version of insurers’ data this summer. The information — including the exact amounts insurers pay each provider for each service, under each plan — will add up to at least one petabyte of data, equivalent to about one billion 500-page books, Dorstel said.

The drawback is that the information — tucked away on hard-to-find web pages, or on third-party sites that many patients don’t know about — is “entirely too convoluted,” said Nicole Christensen, a board-certified patient advocate and CEO of Care Answered in Freeport, who recently had a hysterectomy for which no price information was readily available online.

As people learn that they can shop around for this, it will become more prevalent, just like today, it’s so normal for any of us to use Hotels.com or Google Flights.

Marcus Dorstel, vice president of operations at health tech startup Turquoise Health

Plus, Christensen said, many people focus primarily on seeking out a provider and hospital they trust, not on comparison-shopping by price: “To go shopping for surgeries, it’s just like one other thing to do for people that are presumably in pain or not well.” 

For many patients, health care prices seem to have little direct impact on their finances, since insurance covers much of the cost. However, high prices drive up the cost of health insurance premiums, industry experts say. 

In addition, many patients face high out-of-pocket costs such as deductibles and coinsurance. For those with employer-sponsored plans, the average deductible was $1,945 for an individual and $3,722 for a family in 2020, according to an analysis of the most recent federal data by the not-for-profit KFF, also known as the Kaiser Family Foundation. Patients paid an average 20% coinsurance rate for hospital stays, the group found.

Those with coverage through the Affordable Care Act this year face average medical and prescription deductibles of $7,051 for lower-priced “bronze” plans, down to just $111 for the most expensive “platinum” plans, KFF reported.  

“To go shopping for surgeries, it’s just like one other thing to do for people that are presumably in pain or not well.” 

-Nicole Christensen, a board-certified patient advocate and CEO of Care Answered in Freeport

Credit: Newsday/Alejandra Villa Loarca

Consumers urgently need more information about health care costs, some industry experts said. About four in 10 Americans are carrying debt due to medical or dental bills, and a similar share have delayed or gone without care due to cost concerns, KFF  reported last month.

Many patients get “blindsided” by medical bills, said Cynthia A. Fisher, founder and chairman of PatientRightsAdvocate.org, a Massachusetts-based nonprofit that works to increase price transparency. In many cases, she said, at doctors’ offices and hospitals, “we have to sign that we will pay whatever they choose to charge us, with no idea [what the final bill will be]. So that is a dysfunctional market. And all the power has been to the hospitals, and the insurance companies and all the many middle players that have been capitalizing on patients’ misfortune.”

However, some hospital executives and health care economists say it’s too soon to tell whether consumers’ increased ability to comparison-shop will drive down prices, or if costs might actually rise, with hospitals boosting prices to meet their competitors’ rates.

Many industry experts believe that regardless of whether prices rise or fall on average, they’re likely to become less wildly variable. That’s because previously, providers and insurers negotiated each price in private, with limited information about the market. Now, they’ll be able to analyze their competitors’ rates.

All the power has been to the hospitals, and the insurance companies and all the many middle players that have been capitalizing on patients’ misfortune.

Cynthia A. Fisher, founder and chairman of PatientRightsAdvocate.org

The online publication of price information is required under the federal price transparency rules for hospitals and insurers, based on elements of the Affordable Care Act.

Hospitals have been required since early 2021 to publish their prices for at least 300 procedures. The prices must include 70 specific services that include births, joint replacements and certain heart surgeries, as well as imaging procedures such as magnetic resonance imaging, or MRIs, as long as the facilities offer those services. The information must be published in computer-readable format as well as a more consumer-friendly format. Starting this month, insurers must release computer-readable lists of the prices they pay, and by Jan. 1 insurers must start posting prices in a consumer-friendly format.

The rules are among the latest federal and state attempts to control health care costs. Other efforts include the 2020 federal No Surprises Act, which bars out-of-network doctors from billing insured patients who seek care in emergencies or at in-network facilities.

The cost of care contributes to the high price of health insurance, industry experts said.

Last year, those who get health insurance through employers paid an average of $1,299 in premiums for an individual and $5,969 for a family, KFF reported. The total cost shared by employers and workers  averaged $7,739 for an individual and $22,221 for a family, KFF reported. The cost of individual coverage has risen by 43% and family coverage costs have jumped by 47% over the last decade, the group found.

Many hospitals have been slow to fulfill the transparency requirement. A February report by PatientRightsAdvocate.org found that only 14% of facilities nationwide had complied. A separate review published last month in the Journal of the American Medical Association found fewer than half of hospitals in compliance.  

Hospitals across the country have posted much more information in the last few months, Dorstel of Turquoise said.

That’s true on Long Island as well. Many local hospitals were missing required information when Newsday reviewed the data this spring. By July, however, most of the mandated information was available. The mandates went into effect in the midst of the COVID-19 pandemic and required hospitals to spend a great deal of resources on compiling and publishing the data, said Wendy Darwell, president and CEO of the Hauppauge-based trade group Suburban Hospital Alliance of New York State. 

Many of the lowest prices at Long Island hospitals are paid by the federal and state Medicaid program that covers nearly 79 million mostly low-income Americans, and the federal Medicare program that covers 64 million people, mostly seniors. The American Hospital Association says those programs, which cover 65% of patients, reimburse hospitals for less than the total cost of providing care.

On Long Island, Medicaid reimburses hospitals 67 cents for every dollar spent on care, and Medicare pays 90 cents on the dollar, Darwell said.

Private insurers cover 31% of patients, and the remaining 4% lack insurance, according to the American Hospital Association.

If all private insurers paid Medicaid and Medicare rates, “it would be difficult for many hospitals to keep their doors open, and certainly to provide all the services and the quality of services that they provide today,” said Richard Miller, chief business strategy officer at New Hyde Park-based Northwell Health, which owns 19 hospitals. 

Miller said Northwell has met the price transparency requirements at all its facilities except Mather Hospital in Port Jefferson, which was on a different computer system and will publish its data within a couple of months.

The rates paid by private insurers are negotiated with individual hospitals and health systems, and many patients pay a portion of the price in deductibles and other charges. The prices vary dramatically, with differences stemming from decades of negotiations that took place with limited information about competitors’ prices, industry experts said.

Those who lack insurance or choose to pay out of pocket are charged a “cash” price that can be higher than some insurers’ rates, and lower than others’. Adding to the confusion, hospitals also publish their list prices, or “gross charges,” but they rarely if ever actually charge those full amounts, hospital executives said.

The gross charges are typically “a baseline for negotiations” with insurers, Darwell said. The rates paid by insurers are determined in contracts that typically run for three to five years, hospital executives said.

A sampling of the price variations at hospitals run by Long Island-based health systems, based on the most recent available information: 

• For a lower-back MRI, Stony Brook University Hospital reported that EmblemHealth/HIP-Commercial paid $269.47; Fidelis Care New York-Medicaid paid $282.33; and Empire HealthChoice Assurance-PPO paid $5,126.56.
• For knee or hip replacement, Good Samaritan Hospital in West Islip reported that nine Medicare plans paid $15,856.31, while Blue Cross Blue Shield paid $50,278.82.
• For spinal fusion surgery, North Shore University Hospital in Manhasset reported that the health system’s Northwell Direct network paid $64,857, and plans offered by ConnectiCare and EmblemHealth paid $120,118.

In interviews and written statements, executives with the health systems that run hospitals on Long Island — Catholic Health, Mount Sinai Health System, NYU Langone Health, Northwell Health and Stony Brook Medicine, as well as the public benefit corporation that runs Nassau University Medical Center in East Meadow — said private insurers’ rates are based on negotiations that consider costs, quality, number of patients served and negotiating power of each party, among other factors.

They also said that investing in measures that improve quality and safety are costly; that better health outcomes ultimately lead to lower costs; and that private insurers’ rates must offset the shortfall in Medicare and Medicaid reimbursements and the cost of providing charity care for those in need. 

In a statement, Nassau University Medical Center noted that many of its patients have Medicaid or are uninsured. The corporation that runs the hospital ran a record $135.6 million deficit last year. 

At most hospitals, the higher rates paid by private insurance make up for the “shortfall of Medicare and Medicaid,” Miller said. Profit margins at hospitals “are generally in the low single digits, if they’re profitable.” 

In addition to giving consumers more access to price information, the transparency rules could prompt more employers to cut deals with hospitals, industry experts predict. For private employers, health coverage makes up 7.1% of compensation costs, the most recent report by the federal Bureau of Labor Statistics shows. 

Mount Sinai Health System offers discounts on joint replacements and bariatric weight-loss surgery to employers, who can give incentives to workers who have those procedures at Mount Sinai, system executives said. Such deals are especially appealing to self-insured employers, who pay for employees’ medical costs out of their own budgets,, said Dr. Robert Fields, executive vice president and chief population health officer at Mount Sinai Health System.

In addition, Northwell is marketing its Northwell Direct network, which offers discounted services to self-insured employers by sidestepping insurance companies. . 

For now, industry experts say the price information is of limited use to consumers. Most insured patients focus on their own out-of-pocket costs — and, of course, on getting care from providers they trust — and do not care much what price their insurer will pay.  

Melville resident Rich Michals Jr. recently had knee replacement surgery at NYU Langone Hospital – Long Island in Mineola. Michals, 54, who is president of Parcel Management Auditing and Consulting in Farmingdale,  said his company pays the full cost of its 21 U.S.-based employees’ health coverage.

“Most people just go where their primary care physician tells them to go, unless you know, they’re paying entirely out of pocket.”

-Rich Michals Jr., president of Parcel Management Auditing and Consulting in Farmingdale and recent knee replacement patient

Credit: Morgan Campbell

He never considered researching the price of his surgery, he said, since insurance will cover the cost.

“I wouldn’t even think of that,” and most people with insurance take the same approach, he said. “Most people just go where their primary care physician tells them to go, unless you know, they’re paying entirely out of pocket.”

That is especially true for those seeking treatment for the most serious ailments.

Marjorie Brook, 55, a medical massage therapist from Wantagh, has endured multiple hospital stays since December to get treatment for a rare cancer, and she said she also has had to work hard to make sure the bills she received were accurate and that she got all the financial assistance for which she qualifies. But, she said, “no one’s really shopping — unless they’re really desperate, they’re not shopping around for the best financial deal. They’re shopping around for the best doctor, so they survive.”