The crowdsource solution for price transparency?

The term crowdsourcing (or the analogue term crowdfunding) conjures images of hipsters staring into their laptops, deciding that spending a few bucks on that indie film or yet to be manufactured smartphone accessory is the right way to dispense of some extra cash.

Crowdsourcing for healthcare has actually existed in a variety of forms for years. Genealogy crowdsourcing pioneered by the Mormon Church more than 70 years ago has morphed more recently into genetic research.

Indeed, the Mormon cultural and spiritual center, Salt Lake City, may wind up serving as a crowdsourcing (and crowdfunding) nexus for healthcare price transparency.

If it's accomplished, it would more than likely be the work of Randy Cox. He's a Salt Lake-area software engineer whose startup, Pricing Healthcare, has an interesting premise on delivering data to consumers.

Cox, like millions of Americans, has been flummoxed by healthcare pricing, which is often grossly inflated for even its most common components.

Particularly annoying to him was a recent 25 percent increase in the cost of his wife's immunology service, which is provided by the Central Utah Clinic (CUC), one of the state's biggest medical groups. The price jumped from $580 to $720. Cox said there was no prior warning about the price hike, even though the CUC had been providing care to his wife for years. The couple have a high-deductible insurance policy and had to shoulder all of the increase themselves.

Debra Taylor, CUC's director of clinical and quality services, says all patients are informed in advance if their insurance doesn't cover a treatment, as well as what it costs. However, Randy Cox  says they were not given advance warning.

"If you're concerned, ask beforehand what it costs," Cox claims a CUC manager told his wife. 

That's reasonable if you decide to grab a case of Twinkies after their production finally resumed a few weeks ago--its price is right on the package. But that's a comical presumption when it comes to healthcare services, whose pricing contains more ingredients (and mysteries) than Hostess cream filling. Cox says he and his wife were told CUC's pricing was based on Medicare rates, but this particular procedure isn't covered by Medicare.

Indeed, Cox had to slog through a variety of CPT® codes until he could figure out what caused the price increase in his wife's care. Meanwhile, it costs money to access a CPT price list. Cox had to negotiate a rate with the American Medical Association--which owns the intellectual property of CPT--in order to use it on his website.

Pricing Healthcare members can submit charge data from their medical bills. Cox hopes to eventually get a critical mass from patients to obtain accurate pricepoints for providers in most of the major cities in the U.S.

Although the site would charge members an annual fee, Cox says he would want to waive the fee for members who submit enough billing data. 

Pricing Healthcare went live in June and remains in beta testing. It's a nascent operation now; the one geographical area where it contains pricing is in the San Francisco Bay Area, and that's for four procedures--abdominal CT scan, ultrasound, x-ray and a basic metabolic panel. The site provides the specific CPT code and the fee Medicare pays.

Not surprisingly, prices are all over the map--one facility may charge more than quadruple what another would charge for an ultrasound.

Cox said he expects to get hospital pricing for all of California on his website by the end of the year--the agency that regulates hospitals already provides it to the public. He's also talking to two other state governments about providing a healthcare pricing tool for their consumers, as well as talking to would-be investors. Meanwhile, Cox says new members are signing up daily.

It remains to be seen what direction Pricing Healthcare will take. But given the frustrations of consumers, and that millions more of them will wind up with high-deductible plans as a result of the Affordable Care Act, it's likely that direction is up. One would hope healthcare prices head in the opposite direction as a result. - Ron (@FierceHealth)

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