Hospital Transparency in California
This is Jason Shafrin:
How did hospitals respond to the law? Over 95 percent of all California hospitals reported that they offered free care to uninsured patients with incomes at or below 100 percent of poverty. However, higher-income uninsured patients still faced the risk of high prices based on billed charges.
Further, this policy did not help improve the accuracy of the billed charges to Medicare. Medicare billed charges are as ridiculous as ever. As shown in the figure below, Medicare payments equaled 20 percent of billed charges by California hospitals in 2010, down from 43 percent in 1997. Thus, although the uninsured are paying less for hospital care, the insured may be paying relatively more.
“Thus, although the uninsured are paying less for hospital care, the insured may be paying relatively more.”
This incentivizes being uninsured, which wasn’t a good decisions for those who were insured before this and won’t be a good decision for them now that they’ll be uninsured.
“Over 95 percent of all California hospitals reported that they offered free care to uninsured patients with incomes at or below 100 percent of poverty”
I guess that will take some pressure off of Medicaid, the poor will just get free care. I have a feeling that we’re moving towards increased government subsidization of hospitals that do this kind of thing, giving us de facto Universal Health Care.
Interesting….
Hospital transparency is key. However, won’t this situation just create less incentives for the poor and the uninsured? Sounds like the higher-income people are at a rather small disadvantage here..
I think James is on to something
Accuracy is an important piece of the pie. I do think it’s a bad system when you have absolutely no idea what you should have been charged. Gives companies too much power when you need to dispute a claim.
Sure, LeeAnn, but that’s just one piece of the puzzle. Transparency is a poor substitute for a truly free market so long as so much care is still subsidized. Transparency is only meaningful if people have true choice regarding how to spend their health care dollars.
Shay’s right — why would I even care to know a number I’m not paying?
Possibly, but it starts a conversation that puts pressure on providers to disclose why ‘x’ service costs ‘y’ amount. That’s an important conversation to have because in many cases it’s arbitrary.
LeeAnn, but Why is it arbitrary? It’s a chicken/egg question. Not because of lack of transparency. It’s because of market distortion. Let’s not celebrate transparency as though it instantly creates a free market. That would be like putting fake bunny ears on a dog and calling it a rabbit. It might look slightly more like a rabbit, but it’s still fundamentally a dog.
100% of poverty is I think about $11000 annual income for an individual and $19,000 annual income for a family.
Giving free care to this demographic does not knock my socks off with generosity.
Especially since some patients in this group can sign up for Medicaid right in the hospital.