Alumna’s entrepreneurial venture gives consumers actionable data on health care pricing
Jeanne Pinder ’75 has been steeped in journalism all her life. The Grinnell native honed her craft over the years with the Grinnell Herald-Register (which her grandfather bought and her family still owns), the Associated Press, the Des Moines Register, and The New York Times.
As a journalist and a student of the old Soviet Union, Pinder demonstrated an affinity for complex issues. As a Times editor, she dealt with heady topics like the fall of communism, the 1989 Tiananmen Square incident, the end of apartheid in South Africa, and “a couple of Persian Gulf wars.”
Pinder wrapped up a career in what could be called conventional journalism in 2009 when she volunteered for a buyout from the Times after two separate stints totaling 23 years. What she did after that could hardly be called retirement. Rather, she reinvented herself as an entrepreneur, took an even deeper dive into journalism, and dedicated herself to a question for which no one seemed to have any answers, namely, “What do things cost in health care?”
Pinder’s business invention, aimed at demystifying the health care industry for the practical benefit of consumers, is an entirely different breed of journalistic cat. Called ClearHealthCosts (clearhealthcosts.com), it has become nationally recognized for its expertise in health care pricing. Its data-driven, consumer-savvy approach to web-based journalism has been covered by The Wall Street Journal, National Public Radio, Harvard Business Review, and the Journal of the American Medical Association, among others.
It would not exist had Pinder not answered a challenge to re-examine everything she knew about the information business.
Remaking the model
Uncertain about what she wanted to do after leaving the Times, Pinder decided to join a class in entrepreneurial journalism taught by new-media guru Jeff Jarvis at the City University of New York Graduate School of Journalism.
“The theory of the class,” says Pinder, “was that if CUNY is a journalism school making little journalists, it is doing it for an industry where the revenue model is challenged, if not completely broken. We had a responsibility to think about that and do something about it.”
The charge, she says, was “how to make journalism that pays for itself.”
Denizens of a newsroom have been known to regard the subject of advertising revenue with varying degrees of contempt, but Pinder enjoyed a distinct advantage among journalists trying to imagine a new way of doing business. “I’d worked on the business side on the Herald-Register,” she says. “I’d sold advertising. I knew how important it is. I had more of a business background than a lot of journalists who had been only on the writing and editing side.”
During the run of the class, students had to come up with a business idea, design the model, refine it through a competitive analysis, and convince an expert panel of its efficacy. “At the end of the class, we had a Shark Tank-type pitch contest with a jury of New York City venture capitalists and Internet illuminati to judge us,” Pinder says. “I won 20,000 bucks.”
No sooner did Pinder invest her winnings into a startup devoted to pulling back the curtain on health care pricing than detractors began to surface. It was a sure sign that she was on to something.
“I had a constant chorus of people telling me it didn’t make any sense, it was stupid, it wasn’t doable,” Pinder says. “This was in 2011, so people were saying things like, ‘When the Affordable Care Act comes into effect everyone is going to be insured, so everything is only going to cost $20 and what you’re doing is completely irrelevant.’ Or, ‘Powerful forces will put you out of business because health cost transparency is in nobody’s interest,’ which is true, actually, but those powerful forces have failed to put us out of business so far.”
Undaunted by critics, Pinder forged ahead with funding by “angel” investors and with additional grants from the likes of the Tow-Knight Center for Entrepreneurial Journalism, the International Women’s Media Foundation (funded by the Ford Foundation), and the McCormick Foundation (via J-Lab at American University in Washington). “It wasn’t really enough to form the business and certainly not enough to dismantle the health care industrial complex, but enough to get a start,” she says.
Secrets in plain sight
Pinder’s team of research journalists immediately began surveying cash or self-pay prices for a range of common — she calls them “shop-able” — medical procedures. “There are about 35 of them on the website,” Pinder says. “Not big complicated things, but things that are pretty much apples-to-apples — MRIs, cardio stress tests, Lasik, ultrasounds, an IUD, a vasectomy, a well-woman exam — fairly common things for which you would have discretion over where you wanted to go.”
Prices are plugged into a software tool called PriceCheck, also developed by Pinder’s team, that allows consumers to share, search, and compare what actual providers are charging for comparable medical services in specific locations. It allows consumers to shop for mammograms or teeth fillings with the same price intelligence they’re accustomed to having when buying cars, shoes, or any other consumer item.
Another data set on the site (hospitals.clearhealthcosts.com) collects prices for bigger-ticket items —knee arthroscopy, childbirth, ear tube surgery — from various web sources. Because these prices are collected and categorized in a different way from other prices, the site displays it in a separate data set.
Helping consumers access real prices is a service that, to date, has been provided by no one in the health care industry — unless you count a handful of companies that match up provider and patient and take a nontransparent cut of the transaction for providing this service. Citing her own commitment to being a careful consumer, Pinder says the inability of otherwise intelligent people to understand their own medical costs makes even less sense in a health care sector that accounts for nearly 20 percent of the U.S. economy.
“We receive these medical bills and explanations of benefits that are completely incomprehensible,” Pinder says. “People have no idea what they mean, why they’re being charged these amounts, or what the insurance company is paying. Nobody seemed to know what anything costs. It’s like a secret hiding in plain sight. I thought, why can’t we understand this? It should be pretty straightforward, right? Well, ha!”
The power of agency
“Coming from The New York Times and coming at this problem as journalists, we take a very different approach from what the current incumbents in the health care marketplace have,” Pinder says. “We like finding stuff out and telling people about it. That’s not necessarily high on the agenda of people in the health care marketplace. They have other agendas.
“We are giving people agency in the marketplace, and that’s a very powerful thing.”
Just how powerful is revealed by the numbers on ClearHealthCosts’ website. Pinder and her team of journalists and tech experts, with the help of data supplied by web users, have uncovered disconcerting price disparities in comparable procedures across the board. For example, a vasectomy that costs $150 in Stamford, Conn., can cost as much as $17,000 in Oakland, Calif. An MRI costing more than $6,000 through one provider in San Francisco can be bought for $300 at another provider only a few miles away. Furthermore, nobody in the industry seems interested in advertising the difference.
“There is massive confusion in the marketplace,” Pinder says. “We know it’s true that people who are insured are frequently being asked to pay more than people who are uninsured. It’s a whole new thing for many people because it used to be that having insurance gave you access to a lower price and no additional out-of-pocket. Well, guess what?”
We could guess that in many cases one might do better as a price-negotiating cash customer even if one has insurance, and, Pinder asserts, we would be correct. The actual prices, at least those that can be found out through real customers or that are supplied by willing providers, prove it.
“Insurance companies don’t profit by price transparency,” Pinder says. “They profit by keeping all of this stuff a secret, because if you’re not sure what you’re going to have to pay, then you’re inclined to buy more insurance.
“What we do here is completely separate from any insurance question, because insurance companies won’t tell us what they pay,” she says. “If you’re an insured person, they won’t even tell you. So we do the cash or self-pay price and the Medicare price because those things are fundamentally knowable.”
Beyond that, members of the community share what they were charged, what insurance paid and what they paid, often sending in their bills and statements as proof. This is a compelling back-check on the cash prices, revealing the hidden secrets in the marketplace and helping community members make decisions. For example, Pinder explains, an insurer might pay $400 to Provider A for an MRI, but $2,400 to Provider B for the same MRI in the same metro area.
As experienced users of health care are aware, charges for services depend largely on how services are coded. Most of the searchable prices on Pinder’s site are based on the five-digit Healthcare Common Procedure Coding System, or HCPCS. Medicare reimbursements are shown for the same procedures, because, Pinder says, “Medicare is kind of a yardstick; it’s the closest thing to a fixed or benchmark price in the marketplace.”
Medicare prices also vary according to geographic location. And while we might be temporarily distracted by the fact that Medicare pays $570 for an MRI in California but only $387 in Iowa, ClearHealthCosts is less about fixing everything that’s wrong with the health care machine and more about helping consumers deal directly with factual realities.
“When we write our blog posts, we don’t just point at the problem, we also tell you what to do about it,” Pinder says. “We do data journalism, but we also tell you anecdotes, like what has happened to people, why are they getting charged, and what should you do about it to protect yourself.
“One of the things that we’ve learned is that people are really upset about this issue,” Pinder says. “They don’t want to read any more stories about partisan bickering in Washington. They don’t want to read news stories about Obamacare rates. They don’t want to read stories about insurance companies whining that they’ve been poorly treated. They want actionable information. They want to talk about it, and they want to make a difference.
“Some people want us to think that it’s only uninsured people who care about this, but nothing could be further from the truth,” she says. “Insured people really care about this, both high-deductible and not.”
Media partners and crowdsourcing
Pinder’s business aims at building a critical mass of pricing data specific to as many regions of the country as possible. Consistent with its entrepreneurial origins, it is a for-profit endeavor; so to seek viability on a national scale, Pinder ultimately hit on a strategy of partnering with big media organizations to do crowdsourcing on their sites. ClearHealthCosts now has its price-checking software tool placed on public radio and other media websites in markets like New York, Miami, San Francisco, Philadelphia, and New Orleans.
“Our partners pay us to build and customize this tool for them,” Pinder says. “We do the survey and prepopulate the database with information so that their communities can share and search for things while they’re in their pajamas at 3 o’clock in the morning. We also consult with them on how to generate more traffic and how to write great stories out of this information.”
It’s a mutually beneficial proposition. For its role in the partnership, KQED in San Francisco won the Society for Professional Journalists prize for innovation in journalism. WHYY in Philadelphia won the Pennsylvania Public Service Award for broadcasters. While the middle part of the country isn’t nearly as well represented by media partners as coastal urban areas, in five years Pinder envisions more partnerships, more price transparency, and a bigger, broader version of ClearHealthCosts.
“We don’t have a partnership, say, in Iowa right now,” Pinder says. “We would love to have one. I would say there are six or eight partnerships that are nearing fruition in other states. Non-media partnerships are really attractive, too, but our sweet spot is media. They get it. They understand what we’re doing. We’re not compromised by anybody. We don’t pull any punches. We can’t. We’re all about full-on transparency. Journalists really get that.”
Half-truths versus the internet
What consumers understand is that they will always need health care and that genuine advocates in the medical marketplace are few and far between. As long as buyers have choices in services and providers, the kind of journalism produced by Pinder’s organization can only gain relevance.
“The topic of money will be in every conversation about health care where there’s a discretionary element,” Pinder says. “It has to be, because there’s no way a system can continue like this, charging some people $6,000 for an MRI and some people $300. The Internet doesn’t like it when people lie and keep secrets. And the healthcare marketplace is full of half-truths and secrets about who gets paid what.
“It’s really ripe for some completely crazy thing like somebody telling you that an MRI could be $500 or it could be $2,400. Do you want the $2,400 one? Do you want the $6,000 one? Then you should have that. But if you want the $500 one, then you should have that, too.”
What about quality? Measuring it is difficult, owning it more so
Questions about quality are sure to arise when price discrepancies are significant. Jeanne Pinder tells why ClearHealthCosts is not in the business of quality assessment:
“We’re not medical professionals. We’re not doctors. The medical profession needs to do that, or somebody other than us,” Pinder says. “My partners and I were invited to a state radiology association to tell them about our project. So we went through our presentation and one guy said, ‘You didn’t say anything about quality,’ and we asked, ‘Well, what’s a good quality MRI?’
“There were about 25 radiologists in the room. One of them said, ‘It’s the machine. It has to be the best machine.’ Another guy said, ‘Well if it’s a great machine and it’s not maintained or calibrated, then it’s not a good MRI.’ Another person said, ‘It’s the technologist who arranges the body parts and takes the pictures, because if they’re no good, then the MRI’s no good.’
“Another person said, ‘No, it’s the radiologist who interprets it.’ So they’re having a big argument about it and finally one guy says, ‘The worst MRI is the one that doesn’t get taken because the patient believes that she can’t afford it.’ And they all shut up.
“If somebody shows me a good quality metric, I will incorporate it in a heartbeat,” Pinder says. “But there aren’t any good quality metrics now. There are a lot of efforts to assess quality, from the federal government, from the states, from insurance companies, from hospital chains, from trade groups. There are a million different quality metric efforts, none of them very effective or consumer friendly. But it’s not on us to fix the entire health care marketplace. Somebody should have done that a long time ago.”