Class-Action Lawsuit Highlights Importance of Healthcare Price Transparency

Tuesday, December 19th, 2006
This post was written by Melanie Matthews

A recent class action lawsuit in Seattle detailed in the November 16th USA Today is another example of the need for price transparency in the healthcare industry.

The lawsuit, filed against Virginia Mason Medical Center, stemmed from a patient name Lori Mill who was concerned about a possible toenail infection. She went to her doctor’s office in an outpatient clinic owned by the Virginia Mason Medical Center in downtown Seattle. Her doctor clipped off a piece of nail and sent it to the lab for a total cost to Ms. Mill of $1,133. Mill found out later that she could have paid hundreds less for the same thing had she gone to one of Virginia Mason’s seven other, more suburban, outpatient clinics, where her doctor also practices.

Her situation illustrates a practice that is legal and common, but little known to patients: Some medical clinics are considered “hospital-based” and charge additional fees for the same services, even if they aren’t inside an actual hospital.

The lawsuit argued that, under state consumer protection laws, patients should have been told in advance about additional fees.

Earlier last month, Virginia Mason settled the class-action law suit, agreeing to not only refund money to thousands of patients, but also to tell patients that it charges more at some clinics in its system than others and to find ways to help patients estimate upfront their costs for some outpatient procedures.

As consumers become more responsible for how their healthcare dollars are spent, it is only realistic that we ask for and are given the knowledge to make an informed decision. During “Meeting the Demands of Healthcare Transparency in Pricing and Quality,” an HIN audio conference on this transparency movement, Dr. Lou Diamond, medical director with Medstat and Paul F. Thompson, product marketing manager with Cigna, provided insight on healthcare cost and quality transparency.

In Ms. Mill’s case the facility fee was $418. I know put in her shoes, if I had been told of such a fee, I would have thought twice and sought an alternative to care in that particular clinic – I’m sure you agree.

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