Healthcare price transparency comes to your smartphone

My ongoing quest for hospital price transparency has (in a way) taken me to Nashville, Tenn., the nation's epicenter of for-profit providers.

That's not exactly the logical place for this often quixotic quest. As I have noted before, few hospitals post their prices, and those trying to make a profit are even less inclined to do so.

However, Nashville is the home of radiologist and attorney Jeffrey J. Rice. A former high-ranking health insurance executive with both Duke University and NYLCare, he is trying to use his professional skills to figure out what providers actually should charge their patients and get that information to consumers.

What prompted Rice on this quest? His son, who has a mild case of cerebral palsy, needed an outpatient orthopedic procedure performed on his foot several years ago. The elder Rice scoured the region, finally locating a surgeon 300 miles away in St. Louis he was comfortable with. The surgeon initially offered to perform the procedure in a nearby hospital.

"The first facility initially didn't have a price," Rice told FierceHealthFinance. He eventually discovered it would run $37,000 non-discounted, or $15,000 after negotiations.

Rice asked the surgeon for another choice. He mentioned an ambulatory surgery facility in the same building as his practice.

"Their price was $1,500," he said.

Another time, Rice went in for his annual cholesterol test. He was charged $300, but was able to secure a discount to $200. Rice eventually discovered the actual cost of the test was closer to $20.

Five years ago, Rice founded a company in Nashville called the Healthcare Blue Book. It's gotten some small writeups in the Wall Street Journal and NPR's Shots healthcare blog.

The Healthcare Blue Book's concept is simple: Rice's company has gathered data from self-insured employers and a variety of payers (many of whom are clients) to try and determine fair-market prices for particular procedures in certain parts of the country. About a million employees of Healthcare Blue Book clients can receive specific price information for specific hospitals.

"There are a variety of ways patients can save money," Rice told me, noting that given most insurance coverage these days have high deductibles and co-payments, even a relatively simple procedure as an MRI or an endoscopy can easily run into four figures. "They can easily save $1,000 or even $2,000 if they can look around."

Of course, not everyone is able to look around, or even know what they're looking for. However, the Healthcare Blue Book recently introduced what I see as a potential game-changer: Apps for the iPhone and Android platform.

If you're a Healthcare Blue Book client, you can now walk into pretty much any doctor's office, ambulatory surgery center or emergency room and look up a fair price for your care on your phone in a matter of seconds. If you're not a Blue Book client, you can still download the app and check prices in your zip code.

That's an important shift in consumer empowerment. Many patients are understandably intimidated by their doctors and their local hospitals. Even if they have looked up price information beforehand, they are often so rattled that they can't recall it. It's a little different if you can put your phone down in front of the provider with a specific number on the screen.

The consumer automobile website changed the way millions of Americans purchased cars by offering what it calls the "True Market Value" for automobiles. The prices were based on the zip code the car was being sold in, the options available, and even the color of the paint. I've felt far more comfortable walking into a car dealership and negotiating a deal with that info. Edmunds has since put that data in smartphone apps. While there have been mixed reviews about how that app has performed, such data remains an important bargaining tool for consumers.

I haven't detected any bugs with the Healthcare Blue Book, which offers pricing for procedures ranging from a dental exam to major surgeries. I now know that the fair price for a coronary artery bypass surgery with 10 days of hospitalization in my region is $65,014. Or that a complex eye exam in a doctor's office should run $214.

Facility-by-facility prices only are available in a handful of areas to users who are not Healthcare Blue Book customers. However, Rice said his company is working on expanding the data to every one who downloads the app.

That will be a very interesting day when it arrives. Both for consumers and hospitals. - Ron (@FierceHealth)