Looking to buy a flat screen TV, a new condo, or a nonstop flight to Rio? It’s a snap to comparison shop online for the best deals. But what happens when you’re in the market for a spinal MRI, a vasectomy, or an STD test? Or what about a cardio stress test, a dental cleaning, or a little Botox? More often than not, you’re out of luck.
"This is a marketplace where prices are really sort of hidden," says Jeanne Pinder, a former staffer at the New York Times and founder and CEO of New-York-based Clear Health Costs, a startup that aims to pierce that veil of secrecy by providing clear information on what stuff costs.
Pinder volunteered for a buyout from the Times in late 2009 after 23 years as an editor, writer, and human resources exec. The following autumn, in 2010, she enrolled in a class in entrepreneurial journalism for mid-career professionals at the CUNY Graduate School of Journalism. It didn’t take her long to zero in on health care for her class project.
"I’ve always been interested in why medical pricing is so impenetrable," says Pinder. "I’m one of those people who actually reads my medical bills."
What she found shocked her. Back in 2007, Pinder had surgery to remove hardware inserted to heal a "catastrophically" broken leg. The bill for anesthesia at the small hospital in Westchester County was $6,000 for a 30-minute procedure, including $1,419 for a generic anti-nausea drug named Ondansetron. "Because it was such a big number in the bill, I did some research and found I could buy the drug for $2.47," Pinder says.
The insurer paid its share without protest. But Pinder was still troubled about the wide disparities within a single market.
"Most people think in this marketplace that prices are regulated or fairly uniform," Pinder says. "For most of us, it’s an article of faith that prices should be similar. But prices vary widely,"
Her push for price transparency is timely. Millions of Americans will be required to buy insurance next year, or face tax penalties, under the Affordable Care Act, and many of those people will be choosing from the two least expensive categories. The bronze plans, the cheapest plans offered through the health insurance marketplaces, or exchanges, cover just 60% of the cost of medical care, while silver plans cover 70%.
"The question becomes, 60% of what? A $200 charge or $2,000 charge?" Pinder says. High-deductible plans, attractive to young, healthy people, offer more affordable premiums but that means you could still rack up high out-of-pocket expenses until you meet that deductible. Even if you are lucky enough to get insurance through your employer, your out-of-pocket costs can be considerable because of deductibles, copays and coinsurance, where you might pay, say, 20% or more of the cost of the MRI your doctor ordered.
That’s where Clear Health Costs could help. A New York consumer, for instance, might save a bundle by just taking a subway to a different neighborhood. A cardio stress test costs $100 at one location in the Bronx, and $2,504 at another in Elmhurst, Queens. Prices for a vasectomy range from $450 in Yonkers to $3,500 on the Upper East Side of Manhattan. And Lasik eye surgery, which often isn’t covered by insurance, costs from $2,000 to $5,000 in Manhattan.
So far, Clear Health Costs is offering pricing information in seven U.S. metropolitan areas: New York, San Francisco, Los Angeles, Dallas-Fort Worth, Houston, San Antonio, and Austin. The listed rates—which Clear Health Costs collects through their own reporting, as well as crowdsourced information—reflect the cash price you’d pay without insurance because they’re the best way to do an apples-to-apples comparison.
"Cash prices are actionable information," says Pinder. "I can go to Place A and pay $400 or Place B and pay $600. I won't get any of the mumbo-jumbo that I usually get about ‘How much will that cost?’—to which the common answer from both provider and payer is ‘We can't tell you.’"
The site also shows the Medicare reimbursement rates in a region as a benchmark to help guide consumers.
Pinder launched the beta version of her site last year with $54,000 in seed funding from foundations plus a little help from friends and family. Most of the still-modest 70,000 in monthly page views come from people doing Google searches for the cost of medical procedures. Pinder’s business plan calls for generating revenue from advertising, sponsorships, subscriptions, white papers, events, and consulting.
Clear Health Costs is a semi-finalist for a Knight News Challenge grant, to be announced in January, for a crowdsourcing project involving news partners.
"Like a lot of other startups, we’re doing the best we can with very little money," says Pinder, who collaborated with public radio station WNYC earlier this year on a crowdsourcing project to determine the cost of mammograms in New York.
In the meantime, she just keeps plugging away. "We’re getting a lot of traffic right now on flu shots," says Pinder.
The best price? $14.99 at Costco.