From the U.S. Government Accountability Office, www.gao.gov Transcript for: Health Care Price Transparency Description: Audio interview by GAO staff with Linda Kohn, Director, Health Care Related GAO Work: GAO-15-11: Health Care Transparency: Actions Needed to Improve Cost and Quality Information for Consumers Released: November 2014 [ Background Music ] [ Narrator: ] Welcome to GAO's Watchdog Report, your source for news and information from the U.S. Government Accountability Office. It's November 2014. As consumers pay for a growing proportion of their health care, they have an increased need for cost and quality information before receiving care so they can plan and make informed decisions. Transparency tools from the Centers for Medicare and Medicaid Services and from private websites can provide such information to consumers and others. A team led by Linda Kohn, a director in GAO's Health Care team, recently reviewed the availability of cost and quality information and CMS's tools for consumers. GAO's Sarah Kaczmarek sat down with Linda to talk about what they found. [ Sarah Kaczmarek: ] Your report highlighted a couple of pretty large variations in prices for health care services. Could you give me a few examples of what you found? [ Linda Kohn: ] We looked at a few different tools that are available to consumers who want to look at services and variation in price, variation in the quality of those services, and we found that cost and quality did not always correlate with each other. So, for example, we looked at the prices that are paid in the Boston area for maternity care, and we looked at a number of hospitals that were rated above the average, so they're consistent—relatively consistent, on quality, and we found that the prices ranged from $6,800 to $21,000. Quite a bit of a difference in terms of price, yet they were all rated above average on quality. We looked at another service in a different area in Indianapolis, and we looked at MRIs for lower back, and we found that the cost ranged from $277 to almost $5,200. And the out-of-pocket costs that somebody would pay for that procedure also showed a lot of variation ranging from $277 to over $2,600. That's just the individual's out-of-pocket cost. So the variation also applies to what somebody would be paying out of their own pocket. [ Sarah Kaczmarek: ] Let me ask you, why can it be hard for consumers to get this pricing information? [ Linda Kohn: ] It seems like it should be easier than it is. It's difficult information to put together. The CMS, Centers for Medicare and Medicaid Services, has 5 different websites that they post—posting quality information, some cost information for hospitals, nursing homes, physicians, home health agencies, and dialysis facilities. We looked at those 5 websites. We found that the tools provided some information on quality of care, very little information on cost of care, and we also found that the kind of information that helps consumers the most is information that is relevant to decision they're making. Meaning, what are key quality differences for the procedure that I'm considering? How much am I going to have to pay out-of-pocket? We found that the CMS sites were not as complete in that information. We also found that the information was not always presented in a way that was as understandable to consumers as it could be. Is the information summarized in a way that lets the consumer get to the information as quickly as they want to? [ Sarah Kaczmarek: ] What recommendations is GAO making then to CMS in this report? [ Linda Kohn: ] We recommended that CMS can take steps to improve the information that is available to consumers. It can provide more information, particularly on cost and out-of-pocket costs that people face. It can also organize the information in a way that helps consumers get to the information that they want, that's most pertinent to them more quickly, make it more understandable, summarized in ways that help people to get to the information as quickly as they can. [ Sarah Kaczmarek: ] Now, this is a really important issue for consumers. So what do you see here as the bottom line of this report? [ Linda Kohn: ] Getting information on cost and quality for consumers prior to receiving care is probably most helpful to consumers for non-urgent situations. Certainly in an emergency, or urgent situation, it's not the time that consumers should be looking for this kind of information. So in a non-urgent situation, like we looked at maternity care obviously as planned, and MRI typically is a planned kind of procedure. This is information that consumers can look at. It clearly is important as well for people who do not have insurance and have to pay the entire bill themselves, but even for people with insurance, having this information in advance can be very important. So, for example, somebody has to pay 20 percent co-pay on a visit, which can be typical. Right now an individual wouldn't know is it 20 percent of $100, or is that 20 percent of $2,000. And so using this information can help people plan for those kinds of events when they do go into the health care system. [ Background Music ] [ Narrator: ] To learn more, visit GAO.gov and be sure to tune in to the next episode of GAO's Watchdog Report for more from the congressional watchdog, the U.S. Government Accountability Office.