Health care reform has unquestionably been a challenge to bring about. From legislative wrangling and posturing, to technological glitches, to confusion from the public and providers alike as to what they need to do and what the benefit is to them, it has been a mess. While progress is being made, there's still a long way to go.

At the top of the list when it comes to trying fix the system is getting a clear idea of how much care actually costs, or more precisely, what it should cost for a given procedure.

Most states have made an effort to clarify the cost, but nearly all have literally failed up to this point, with 45 states receiving an F grade from Health Care Incentives Improvement Institute, a non-profit dedicated to tracking and ranking health outcomes. Of the remaining states, Maine and Massachusetts scored a B, while Colorado, Vermont and Virginia squeaked by with C grades.

But it was high-scoring Massachusetts getting some extra scrutiny this month, when the state rolled out its Act 224, which was passed in 2012, but only came into effect on October 1. According to the law, Massachusetts residents can now call a hospital and within 48 hours, get pricing as to what the actual cost of a procedure they need will be.

Reality vs. idealism
The thought was that the availability of the pricing would educate consumers and also help to keep facilities' billing within reason. It was also hoped that informed consumers would help to drive down the cost to the system because they would shop for the best price. The reality has been more sobering.

"My impression is that there is tremendous confusion in implementing the law," Steve Kelly, founder of ELAP services, told DOTmed News. Kelly's firm specializes in tracking and researching health care bills for their clients.

He said Kaiser Permanente conducted an investigation where they created a fictitious patient - a pregnant woman - who was trying to get an idea of the cost of delivering her baby. The price ranges and details she received varied widely. "It was so vague as to be almost meaningless," said Kelly. "In one case, the person that was to provide the information was away for two weeks."

Kelly said a challenge the public faces is that they're being asked to provide the Current Procedural Terminology (CPT) codes. But those codes can be difficult to track down. Another challenge is that patients need to get the total cost of the procedure. That means each ancillary care provider involved needs to supply a price. "The amount of time it would take to contact five professional corporations, most people don't have the time or ability to accomplish that," said Kelly.

A new approach
"A trend we're encouraged by is one where an employer steps to the fore and begins to negotiate with providers, and is more active in the health plan," said Kelly. "Calling it consumer-driven health care is simply pushing more costs down the line. We think a potential solution is for employers to look at the landscape of medical providers in their region, and say to the hospital, 'Our employees are going to have babies, so could you tell us a bundled rate of what it would cost for a routine delivery?'"

That cost could then be communicated to the employees, but even better, the employer is more likely to get the answers they need and can gather historical data, with any new employees able to benefit instead of having to go through the process anew.

Kelly also encourages employers and hospitals to sit down and talk business. "In New Jersey, we arranged a meeting between a school district and hospital, and it was the first time the two had ever had a meeting or even a single discussion, yet the school district was sending over $10 million a year to the hospital. They were even laying off teachers to pay for their health insurance plan, but the discussion helped to solve some of the problems."

How hospitals benefit
Beside the obvious benefit of avoiding fines as states pass health care cost transparency laws, hospitals can also benefit by bringing in more customers. The facilities that are well-known for fair and clear pricing will have a leg-up on their competition. Of course, that's if all other things are equal - most people aren't going to bargain shop when it comes to putting cost over quality for a major operation.

But Kelly thinks while consumers may drive reform, the employers are more likely to lead the charge. "Using the New Jersey school district as an example, with 500 employees, they're going to be able to get things done quicker when negotiating with a hospital. They can basically put out an RFP and have the hospital take notice."

"We think there are a lot of initiatives moving in the right direction, but it's a big, complex process and it's hard to change cultural methodology that has been in place for so long. Our prediction is that if local employers and health providers can have an open dialogue, everyone will benefit," Kelly said.