Where There is No Equilibrium Price
For treating a basic asthma episode, cases in the 10th percentile of distribution cost $98 each while in the 90th percentile the cost was $1,535 per case, [after adjusting for case severity].
Migraine sufferers in the 10th percentile got treated for $94 while those in the 90th percentile cost the system $2,006. Expense for treating high blood pressure ran from $149 to $1,469 per episode.
Bills for implanting a drug-coated coronary artery stent were $16,092 in the 10th percentile and $36,487 in the 90th — more than twice as much. Uncomplicated baby deliveries ranged from $6,149 to $12,090.
Kaiser Health News. Health Affairs study.
The authors’ conclusion: “Changing incentives through payment reforms could help to improve performance, but providers are at different stages of readiness for such reforms.”
I think this is a function of the third party payer system. A more competitive system would incentivize doctors to price their services accordingly.
The problem isn’t that prices vary from one provider to another. It is common for prices to vary. For instance, prices for milk vary tremendously: from 7-Eleven to Central Market; for dairy milk to almond milk; for single-serve cartons to gallon jugs.
However, although prices vary, they are transparent in consumer markets. You do not have usually have to ask the price. If you do have to ask the price (because someone forgot to mark the price on the product), the store clerk will readily tell you. They won’t preface their response with: which bank do you use? Which health plan are you in? Which firm employs you?
This discussion of price transparency makes certain accurate presumptions that the MD is working off a “standard of care” cookbook –
–variations of pulmonary toilet, oxygen, medications etc. for an acute “asthma treatment”
–variations of pharmaceutical strategies for an acute “migraine treatment”
which to lay people appears to involve itemized grocery-type lists of consumables that somehow can be compared.
The more serious problem is that it’s a rare physician who actually stops and gets the patient reassessed and treated so as to eliminate the asthma or the migraine. That is where we need competition.
Asthma and migraine are TYPICAL complaints of patients I treat with food, mold and/or chemical allergies. An appropriate course of immunotherapy, basic diet and environmental changes can end much if not all of this in our subpopulation. Yet there is little interest on the part of physicians or patients in definitively dealing with the asthma or migraine if it involves these labor and time intensive approaches, even when they’re entirely safe and effective.
We as physicians define the “standard of care” in ways that tend to promote treating symptoms and not the underlying root cause. Many patients who could be well, particularly in my field, have no idea that is even possible.
What are we doing when a patient pays with his own money for a $1.50 polish sausage and a Coke at Costco and then he has to pop a $3.00 nexium which costs him only $0.60?
Dorothy Calabrese MD, San Clemente, CA
Couldn’t the 90th percentile prices be because they are recieving better care (better physicians)?