Pennsylvania Health System Offers Up-front Pricing, Prepayment

A Pennsylvania health system is making a significant change in how it charges patients for procedures. Instead of sending them or their insurers a complex bill with dozens of different charges after the fact, St. Luke’s University Health Network is posting all-inclusive prices for common procedures on its website, then having patients pay in advance.

This is, of course, nothing unusual in other sectors of the economy; most businesses tell customers how much something will cost up front. In the healthcare sector, however, it’s something of a rarity because for the last several decades, the primary customer has been the insurance company, not the patient, so patients had little desire or need to see how much a procedure would cost in advance. In fact, patients who did try to find out how much things would cost were often given the runaround, as The New American reported this summer:

“I called local surgeons and facilities to ask for hernia surgery costs, and never received a firm price, or complete information about what was actually done,” said Bob Singleton of Dallas, Texas. “The verbal estimates (they wouldn’t put them in writing) were in the $5k to $8k range, and that was after their ‘discount’ for cash payment, which was 5 percent.”

Some small, independent physicians’ groups such as the Surgery Center of Oklahoma (profiled in the above-linked story) have been offering up-front pricing for years. St. Luke’s, on the other hand, has a network of six hospitals and over 200 medical centers in Pennsylvania and New Jersey.

We believe we are the first full service hospital and health system in the nation to offer this type of price transparency program,” Joel Fagerstrom, executive vice president and chief operating officer of St. Luke’s, said in a press release announcing the program.