The issue is that if you have insurance, you're not paying the charge master rate or the Medicare rate, you're paying the negotiated (and likely non-public) rate for your insurer. The 20% co-insurance you pay is based on the negotiated rate.
Exactly. If this knew what my insurance company had negotiated for the procedure, and I could input my policy details to figure out what my personal cost would be then I can totally see the usefulness. But as a consumer I just have no idea at all what knowing the Medicare reimbursement prices tells me.
If I assume that the relative differences that Medicare has negotiated are similar to the relative differences my insurance company has negotiated (which I'm guessing is an invalid assumption), and if I accurately know what my policy will cover vs not cover (again, a nearly impossible thing to know given how complicated these things are), then maybe you can make a decision with this data. But the system is so complicated that I don't think that works at all by just using this dataset.
Yeah, unfortunately what CMS pays for procedures bears little relation as to what private insurers pay. It all depends on the local market for the provider. If most of the population goes to only a few providers, the providers have a lot of sway in negotiations. They will often ask for (and get) per-diem rates or percentage of charge.
If the population goes to a number of different providers, then the insurance company can play hardball and say "if you don't take this rate, you're out of our network, good luck with that". In those cases, they'll negotiate an MS-DRG + X% rate.
The reason why negotiated rates with private insurers are non-public is because it's a negotiating tool. If hospital A gets paid $5K for a heart attack and finds out hospital B a block away gets paid $7K for the same thing, the next round of negotiations will be very rowdy.
One factor that keeps these negotiated rates from becoming public is that a lot (actually, almost all) of these contracts signed between hospitals and insurers have a gag order of sorts built into the contract by the hospital. These gag orders prevent the insurer from making the hospital's rates public, and what's more, the terms of these contracts usually forbid insurers from even revealing the existence of these gag orders. Believe me, insurers would love to be able to steer policyholders towards cheaper and higher quality -- better value -- care, but these gag orders make it almost impossible for them to do so. It's an incredibly screwed up system all around, and everyone's complicit -- it's not just the insurers and other payers.
Luckily insurers have begun to find a way around this by selling bulk claim data to third parties who can analyze them and extrapolate the contracted rates on their own (a la Castlight, Change Healthcare, etc.).
True re: negotiated rate. However, the whole premise here is that there is some correspondence between this rate and the negotiated rate. If the negotiated rate is the same across the country across all hospital systems ("the magical mid point price") then this chart is not useful. I doubt thats the case.
US Patients go to south america and Asia to get treated. I don't think shopping around the country hospitals to figure out a good option is going to be a big problem. This is a good first step.
the whole premise here is that there is some correspondence between this rate and the negotiated rate
That is a plausible but false assumption. Different providers negotiate different rates. In many cases, the negotiated rate for a given provider is lower than the "cash rate" that an uninsured person would pay, but in many cases the negotiated rate it is actually much higher(!). Maybe in these cases the insurer gets an end-of-year volume-based discount that the insured (me) never gets to see.
Source: my recent experience shopping for an MRI while on a high-deductible plan.
