I'm Sarah Kliff, Senior Policy Correspondent at Vox. I spent the last year reading 1,182 emergency bills to expose the nightmare that is hospital billing in the US. AMA!

Hi Sarah -

I'm extremely excited the work you're doing. I also love this NYTimes article, as it's totally on point (I have actually seen many visiting dignitaries pay full price as the hospital director mentions). I believe the public has quite a bit of opportunity for price transparency now with the data available, though it would take some developer leg work and crowdsourcing to aggregate usefully. Source - I've worked in hospital/provider contracting, and I've also consulted for 40 family members over thanksgiving with hospital bills for the past 10 years. For anyone interested, here are the key pieces of data to dig into to create a clear picture of patient costs at a hospital (for those with commercial/employer sponsored/many ACA plans).

Plan Documents (and Summaries of Plan Documents)

Hospital charges are like Drew Carey's opening line in Whose Line Is It Anyway - "Welcome to Whose Line, where everything's made up and the points don't matter." The charges, more often than not, don't matter to patients with commercial insurance plans.

The most important document to know is the plan summary that comes along with your insurance subscription (updated annually). I have mine in front of me now. It's 3 pages, table format, with 8 footnotes at the end that are relatively confusing. But I generally know what I will owe for primary care, specialist, ER, outpatient surgery, and inpatient services as I have a specified daily copay, or one time copay, for each service.

I went to the ER yesterday via ambulance (I did, it sucked). My ECG will be $508, per the ER I went to's Chargemaster, and my ER Level 1 Visit (I know it will be level one after 5 minutes reading through my coverage summary) will be $1008. I'm unaware of the Ambulance cost.

At the end of things, I will owe $550 dollars: ER facility fee (in network) + emergency transport per my Plan Documents. I recommend you study your family's Plan Documents. I also suggest a Vox style article aggregating Plan Documents (to the extent this is legal, I do not know), to get a better picture of what patients are actually paying in the ER (loop in research for Medicare, Medicaid patients as well).

Most of my Plan Rates are straight forward copays. However, I notice some of my services (infusion therapy - chemo), are paid at a coinsurance: 20% of contracted rates. This is where the trouble begins.

So, How Am I Supposed to Know the Contracted Rates?

For now, other than the aforementioned All Payor Claims Databases in states like Mass., patients really only have one thing to go off: their Explanation of Benefits from a hospital visit. The three way (and sometimes more, if you have more than one insurance plan) breakdown of a hospital payment is most apparent through an EOB. On it, you see claim line charges, the payment allowed (usually broken down by line) by the insurance company, and the patient's liability for covered services. You often see the codes (DRGs, HCPCS, and sometimes others) that went into the logic.

How is this information useful?

You can think of every transaction as some formula with hidden variables and hidden operators, like: " X (plus? divided by? multiplied by?) Y = Z " except a little more complex. However - not THAT complex. Though there are some exceptions, the majority of hospitals and insurance plans use a combination of the same formulas, and the driving variables for these formulas are usually pretty apparent (it's not driven by the cost of your sling, or IV bag, but likely the type of room you stayed in). And these rate structures rarely change.

Much in the same way Sarah collected data for ER visits, one with high school algebra skills could feasibly aggregate a few bills for patients of the same hospital, insurance company (doesn't really even have to be the same plan), and relatively similar procedures (say, 3 maternity claims) and back into many payment formulas.

Why Does this Chargemaster Data Matter?

The FDA and NDC keep track of pretty much all drugs and medical supplies that are for sale in hospitals across the US, their generic, branded and common names. So, a bored programmer could take public data, link it to this Chargemaster data, and make it simpler for patients to understand what is what. Combine that with crowdsourcing a few infusion therapy bills, for example, and again you could back into cost share per drug dose:

Anyone that's received infusion therapy and looked at their EOB will notice that a lot of the time, the "contracted rate" is linearly related to the cost of your infusion drugs. While I mentioned that the charges don't matter, sometimes they do, and it's obvious if they did on your EOB. If you're going to be put on a chemo regimen, you can usually back into the dosage of your drug, and the drug name, using your body weight. You can use that dosage, compare that to your chosen facility's charge master, and hypothetically estimate your eventual cost share per infusion visit.

Two Final Comments

To estimate Medicare and Medicaid patient costs, this Chargemaster Data, DRG data, and public CMS data (it's all on the web) is already enough to fill out the whole payment formula. It's just really complex, and good luck.

Also, there are plenty of exceptions to the commentary above. But, there is a lot of low hanging fruit out there for those seeking more cost transparency willing to pool resources.

Conclusion of Reddit Comment: Times are Changing. For Now, Patients Need Third Parties (Reporters like Sarah crowdsourcing EOBs, Cost Transparency Startups, and Bored Reddit People) to Help

/r/IAmA Thread Parent