Tag Archives: price transparency

Health Care Costs

Still No Transparency in Medical Pricing

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Entrepreneur David Williams has good insight into the limits of Health Savings Accounts as tools of consumer empowerment, discussing:

…… a consumer who did his darndest to find a good deal on a CT scan, finally settling on the $475.53 price at Coolidge Corner Imaging.

But the bill he got later was for $1,273.02 — more than twice as much — from a hospital he had no idea was connected to the imaging center.

“I was shocked,” said White, a doctor of physical therapy who thought he knew his way around the medical system. “If I get tripped up, the average consumer doesn’t have the slightest chance of effectively managing their health expenses.”

The patient wasted tons of time and effort trying to get the problem cleared up. He cared since he had a high deductible plan.

In my view, high deductible plans are a pretty crude instrument to encourage cost consciousness and price transparency. (David Williams, MedCityNews, June 2, 2015)

I agree. NCPA has long championed HSAs. However, stories like the one discussed here are too common. HSAs need to become more than a way to shift costs from premium to out of pocket. Health insurers need to get out of the business of fixing prices.

If we had not been distracted by Obamacare, we might be there by now. Hopefully, we’ll be back on track before too long. I have proposed a “common law” solution to the problem of price transparency. Read more about it here.

Health Care Costs

Price Transparency: Organizations to Watch

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George Washington University’s Master of Public Health program has complied a nice list of fourteen “organizations to watch” because they are moving the ball on price transparency. The woman who wrote the article, Emily Newhook, sent an email to NCPA bringing it to our attention. Unfortunately, we can hardly ever make time and space to profile lists compiled by other parties, but I decided to give this one a boost for a number of reasons.

First, it is exciting to see a school of public health get interested in this issue in a positive way. It was not too long ago that any proposal that included Health Savings Accounts or similar tools that removed healthcare dollars from insurers and returned them to patients brought forth wails of anguish from the public-health community about “barriers to care” and the like. Now, according to Ms. Newhook’s description: “This kind of price transparency empowers consumers to comparison shop for health care as they would a car, house or television, forcing higher priced providers to lower their prices to stay competitive.” This is unusual language for a school of public health, and is to be congratulated.

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Health Care Costs

Families USA Has an Excellent Report on Price Transparency — Really

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Families USA, a leftist advocacy outfit often criticized in this blog, has published an excellent — not perfect — report on price transparency. Maybe it’s just because I’m feeling generous going into the last long weekend of the summer, but I think this report deserves a shout out from our side:

Prices for the same health care service can vary drastically across providers, and it is difficult for consumers to get information to compare providers based on both price and quality.

Making information on health care prices and quality accessible will help consumers compare costs, choose high-value providers, and anticipate their expenses.

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Health Alerts

Patient Power Puts Pressure on Prices

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A study recently published in Health Affairs describes how price transparency drove down the cost of MRIs by almost twenty percent from 2010 to 2012. Compared to patients who did not have the advantage of transparent pricing, cost per procedure dropped $220. Further, there was a significant shift from hospitals to outpatient facilities.

This result is just the beginning. It was not a result of true consumer-driven health policy, but an intervention by an insurer. When a physician referred a patient for an MRI, the insurer required prior authorization before paying for it. When the patient called for prior authorization, the customer-service rep was able to give the patient the choice of a lower-cost provider in the same area. Importantly, the insurer’s rep was able to tell the patient how much he or she would save by using the lower-cost provider.

This is something that providers resist mightily — for obvious reasons. As a consequence, more expensive providers, especially hospitals, dropped their fees significantly. This resulted in a 30 percent compression of prices.

It is a step in the right direction. The article notes that government dictating price transparency has no effect — something we have discussed previously at our blog. Nevertheless, there is a lot further to go. For example, one third of the patients had zero co-pay or deductible, so were completely insensitive to price. Also, it still requires too much bureaucratic intervention. Why should a patient have to call the insurer to figure out the best price for the service?

For reducing costs, imaging is probably low-hanging fruit. Nevertheless, this experience teaches valuable lessons. Prior authorization alone (when an insurer simply makes a yes or no decision on whether it will pay for a procedure) is a cause of irresolvable conflict between payers and providers. Because the patient remains insensitive to price, if the physician decides to do the paperwork for prior authorization, it does not reduce costs. This was confirmed for Medicare in a Congressional Budget Office estimate in 2013.
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Health Care Costs

Price Transparency: Even Hospitals are Starting to Figure It Out!

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credit-card-2Like many, we’ve been frustrated at the lack of price transparency in U.S. health care, especially form hospitals. Good news: They are coming around!

The American Hospital Association (AHA) has published an informative white paper, clearly explaining the state of price transparency for both hospitals and health plans. It surveys what hospitals are doing to ensure patients better understand their expected out-of-pocket costs, what tools health plans are offering beneficiaries to estimate costs, and the legal and regulatory environment. The language used in the white paper is strikingly different from that which we are used to seeing from hospitals:

Price transparency also can lead to improved quality and efficiency as providers benchmark and improve their performance against peers and national averages. To realize these potential benefits, policymakers and the public increasingly are calling for greater access to information.

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Hospitals

Hospital Price Transparency: More Toothless Regulation

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The Administration continues to promulgate ineffective regulations that are supposed to help patients understand how much money they owe their hospital. Here is this month’s proposed rule updating the hospital Inpatient Provider Payment Services (IPPS) schedule for 2015:

Hospitals are responsible for establishing their charges and are in the best position to determine the exact manner and method by which to make those charges available to the public. Therefore, we are providing hospitals with the flexibility to determine how they make a list of their standard charges public. Our guidelines…are that hospitals either make public a list of their standard charges (whether that be the charge master itself or in another form of their choice), or their policies for allowing the public to view a list of those charges in response to an inquiry.

It is hard to imagine how this is going induce hospitals to present good-faith charges to patients, whether they are insured or not. A better solution would rely on common law, not federal regulation.

Health Care Costs

“I Felt Like A Hostage”: Towards A Solution for Medical Price Transparency

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I recently wrote an article critical of a business groups’ approach to improving transparency of prices for medical and hospital procedures. However, we do have a serious problem when it comes to figuring out how much we owe for treatment.

Magnifier over FiguresIn Saturday’s New York Times, the estimable Elisabeth Rosenthal has another excellent report (gated, for subscribers only) about a failure in American health care: Even insured patients cannot get prices from their healthcare providers.

Rosenthal writes about a woman who went to a dermatologist’s office, where a physician’s assistant cautioned her that a white spot might be cancerous. A biopsy confirmed it. Rosenthal then unfolds a “daylong medical odyssey several weeks later, through different private offices on the manicured campus at the Baptist Health Medical Center that involved a dermatologist, an anesthesiologist and an ophthalmologist who practices plastic surgery. It generated bills of more than $25,000.”

The patient’s share was $4,590, which she whittled down to $3,000 after much effort. A highly educated patient, at no point was she told how much her bills would be, nor given an adequate response to her requests for simpler and less expensive treatment. “I felt like a hostage”, she laments.

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Health Care Costs

Crowdsourcing, Price Formation, & Health Information Technology

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From the perspective of the average patient, going about his life unconcerned about health policy or economics, what is the most frustrating characteristic of U.S. health insurance? Surely, it is the madness of the billing cycle: Never knowing how much a medical service costs until long after you’ve received it, and sometimes only after a flurry of phone calls and paperwork that can take months to clear up.

Last year, a non-profit called Costs of Care sponsored a national essay contest, inviting people to submit anecdotes “illustrating the importance of cost awareness in medicine.” One of the winning entries concerned a billing error for inserting an IUD.  Before the procedure, the patient learned (via “a few keystrokes”) that the cash price would have been $843.60. Insured, her out of pocket cost was to have been about $200.  Instead, she received a bill for $1,100 that took months to sort out.

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