Morgan Henderson of The Hilltop Institute at UMBC co-authors new research investigating the feasibility of price shopping for two common hospital services

Published: Oct 23, 2023

An adult wearing a light blue collar shirt stands outside with black and gold banners and trees behind them. Hilltop Institute
Morgan Henderson. (Image courtesy of The Hilltop Institute)

New research published in September in the Journal of the American Medical Association of Internal Medicine reported pricing discrepancies at top hospitals almost two years after the U.S. Centers for Medicare and Medicaid Services created the Price Transparency Requirements for Hospitals to Make Standard Charges Public rule. The rule requires all non-federal, non-tribal hospitals that are licensed in each state to list their standard charges for all items and services provided. 

The goal of the rule was to create greater transparency in the prices that hospitals charge to patients and payers. In theory, this data should help the public make the most informed decisions about where to receive their care, as reported by The New York Times with data support from Morgan Henderson, principal data scientist, and Morgane Mouslim, advanced policy analyst, at The Hilltop Institute at UMBC.

“Hospitals have been required to post this data for almost three years, and most hospitals are posting something,” says Henderson, a co-author of the paper along with colleagues from the University of Texas Medical Branch (UTMB) at Galveston, Rice University, and business entrepreneur Mark Cuban. “However, very little attention has been paid to the extent to which the prices appear to be accurate.”

Secret shoppers, different prices

The new cross-sectional study compares 60 U.S. hospitals’ online cash prices with their over-the-phone cash prices for vaginal childbirth and brain magnetic resonance imaging (MRI). The data was collected between August and October 2022 from “secret shopper” phone calls to 20 top-ranked hospitals as well as 20 safety-net hospitals (which accept patients who cannot pay) and 20 non-top-ranked, non-safety-net hospitals.

The study found that the online prices hospitals are required to post were missing for 47 percent  of hospitals for childbirth and 10 percent for MRIs, said Merina Thomas, a doctoral student at UTMB at Galveston, who was the lead author of the paper.

“Among those hospitals where prices were available online, the online price often did not match the prices provided over the phone,” Thomas said to utmb Health. “For example, a hospital might have an online price for an MRI of $2,000 but give a phone price of $5,000, or an online childbirth price of $20,000 but a phone price of $10,000.”

This research is among the first to attempt to investigate the validity of hospitals’ pricing transparency data relative to other pricing benchmarks. “While this study doesn’t explicitly assess the accuracy of these price transparency data files,” says Henderson, “by comparing them to telephone-based price estimates, we demonstrate that something (either the accuracy of the price transparency data, or the accuracy of telephone estimates, or both) isn’t working.”

The paper was authored by Thomas; Peter Cram, professor of internal medicine at UTMB; Cuban; James Flaherty, UTMB medical student; Jiefei Wang, assistant professor of biostatistics and data sciences at UTMB; Henderson; and Vivian Ho, professor of economics at The Baker Institute of Public Policy at Rice University.

Henderson and Mouslim have conducted several studies on price transparency. Learn more about this research at The Hilltop Institute.

Tags: , ,

Scroll to Top