Monday, May 10, 2010

AmSurg's CEO urges transparency in health costs

WASHINGTON — Let's say you want to buy a television. You find the model you like at one store for nearly $500, but at another store the same model is less than $200.
Basic economic theory says you choose the cheaper TV. If enough people do that, the store charging more lowers its prices.

That basic idea — transparency in pricing and quality benefits consumers and drives down prices — should be applied to the health-care industry, the CEO of a Nashville company testified last week.

Christopher Holden, president and CEO of AmSurg, which has 203 ambulatory surgery centers in 33 states, testified at a House hearing last week about legislation to require health-care providers to disclose what they charge for products and procedures.

Holden told members of the House Energy and Commerce Subcommittee on Health that if half the Medicare patients who sought surgical services at a hospital last year had instead gone to an outpatient surgery center, Medi care would have saved $2 billion.

The average cost of cataract surgery is $495.96 at a hospital and $192.49 at a surgical center, he said. Other average price differences he cited include $76.05 for a colonoscopy at a surgery center versus $186.06 at a hospital, and $209.92 for a knee arthroscopy in a center versus $403.36 at a hospital.

"There is very little information available to patients about the relative price of services offered by different types of providers in their community," Holden said.

It's a little more complicated

Rep. Frank Pallone, D-N.J., subcommittee chairman, said he supports the legislation but cautioned that the complexities of the health-care system make the benefits of transparency less clear. "Purchasing health care is not like going out and buying a car," he said.

People with health emergencies aren't likely to have the time or inclination to price-shop, Pallone said, and patients are often unwilling to go against the recommendation of their family physician.

Forty-one states already have some sort of disclosure requirements, said Steven Summer, CEO of the Colorado Hospital Association, who testified on behalf of the American Hospital Association.

The Tennessee Hospital Association provides information about the costs of procedures at hospitals through its Tennessee Hospitals Inform website at

The only witness to oppose the legislation was attorney Michael Cowie, formerly with the Federal Trade Commission. He said requiring large providers, such as drugmakers, to disclose negotiations with wholesalers or other intermediaries could lead to collusion and price-fixing.

But all subcommittee members of both parties expressed support for increasing available information on pricing and quality of care.

"You can find better reviews about a blender than a bypass," said Rep. Michael Burgess, R-Texas.

Contact Bill Theobald at

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