By John Ballard
I'm encouraged to report that a national conversation about health care costs are finally going mainstream. ABC News, which has also done excellent journalism about health care in the past, put this piece up last night.
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Those following the discussion may also be interested in the following links.
?By now readers here already know about ALEC (American Legislative Exchange Council), a well-funded outfit now finally under scrutiny from authorities, and its super-Conservative agendas. In ALEC, �Shadowy Group� Behind State Efforts To Sabotage Health Reform Faces Heat From IRS Naomi Freundlich tracks the latest ways that group continues to attack health care reforms, one of many items on an evil punch-list.
In terms of health care, Wendell Potter, a former health care executive and CMD�s Senior Fellow on Health Care, writes in The Nation, �As its archive reveals, ALEC has been at work for more than a decade on what amounts to a comprehensive wish list for insurers: from turning over the Medicare and Medicaid programs to them�assuring them a vast new stream of revenue�to letting insurers continue marketing substandard yet highly profitable policies while giving them protection from litigation.� This includes model bills that allow insurers to sell products across state lines�including �junk insurance� and very high-deductible plans�even though they may not meet the standards of state insurance commissions.
?Consumer-Driven Medicine�s Fatal Flaw
Merrill Goozner, well-known writer and journalist specializing in health care matters, lays out the pricing issue (rather the lack of pricing information) in this post at The Health Care Blog.
In a week it has collected a scrappy bunch of comments, mostly from insurance and other industry insiders (not many actual consumers go here for information), arguing among themselves. For a reader with patience, willing to overlook a lot of sarcasm and back-biting, one can catch a glimpse of the behind the scenes obfuscation involving providers, group insurers, TPAs (third party administrators) and insurance plans, mainly high deductible variety, being marketed for consumers with Health Savings Accounts (or Medical Savings Accounts -- I'm not sure which... they are not the same but since I'm on Medicare it isn't an issue that intrests me enough to do that homework.)
Where Are The Prices?
Employers are already moving in the direction of giving consumers �more skin in the game,� according to a recent survey by the Employee Benefits Research Institute. One in five Americans are already in high-deductible insurance plans, an all-time high, even though this approach is leading many to skimp on preventive services that could avoid higher health care costs down the road.
Unfortunately for the architects of such proposals, there�s a crucial element missing from their proposals, something that is necessary to make any market work: accurate and easily accessible price information for consumers. Have you ever walked into a doctor�s office and seen a price posted for all the tests, products or procedures that might be offered during your visit? At the hospital? Ever seen a price list at the local pharmacy?
The problem of price opacity in health care is not easily solved. Health care providers are more like airlines than the local Best Buy or Macy�s. They charge different patients different prices depending on who insures them. The uninsured pay the highest prices, the equivalent of a hotel rack rate.
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I think this video has been up before. But in any case it's a good time to run it again.
" Have you ever walked into a doctor�s office and seen a price posted for all the tests, products or procedures that might be offered during your visit?"
ReplyDeleteWhat good would it do if the prices were posted? Are you really going to have brain surgery performed by the lowest bidder? Are you going to go to different doctors for different ailments based on which one has the lowest price for each one?
When discussing your care with your doctor you are perfectly free to discuss cost concerns if you have them, and I have alwoys done so. I have never had a doctor become offended by me raising cost concerns.
Interesting. The vidoe clip was not working yesterday, but today I ran it and realized that CBS News ran almost the exact same piece. It contained precisely the same numbers and, while the script was slightly different, the approach was precisely the same. It could have been done by the same people, and must have been because using even one different source would have resulted in different numbers.
ReplyDeleteThat says something about our "network news" doesn't it?
"Unfortunately for the architects of such proposals, there�s a crucial element missing from their proposals, something that is necessary to make any market work: accurate and easily accessible price information for consumers. Have you ever walked into a doctor�s office and seen a price posted for all the tests, products or procedures that might be offered during your visit? At the hospital? Ever seen a price list at the local pharmacy?"
ReplyDeleteThat is the crux of the problem. Imagine being able to shop, comparing prices and quality of services, for your healthcare. Some good old fashioned competition would definitely bring the cost of healthcare down
One would think that competition would bring prices in line, but I have noticed two flies in the ointment.
ReplyDeleteFirst, of course, is the grip that insurance companies have had on the system for years. When the same type of market distortion appears in other goods or services anti-trust and other regulatory measures are put into place as a corrective. Just last week there was a big flap about Apple and the publishing industry engaging in price-fixing to stop Amazon from selling both paper and e-books at more competitive prices. Examples abound. Make a list of your own. But medical services (especially pharmaceutical and device makers) and their insurance handlers have been getting a pass for years on fleecing those who ultimately must pay.
Second, there is widespread ignorance of basic accounting among medical professionals. This is not universally true, of course, but most doctors cannot discern the difference between professional compensation and business profits.
Pricing, such as it is, is not based on supplies + depreciation + utilities + other overhead + rent/lease obligations + debt service + (this is the good one) professional compensation + profit.
Instead they shoot from the hip, looking at "usual and customary charges", coding lists, percentages or reimbursements expected from various insurance and government sources, etc. Everyday retailers who operate in the same manner typically crash and burn in the marketplace.
As I said, I'm loving it, watching an entire segment of the economy (healthcare accounts for about twenty percent of all money spent in America) finally experiencing what the stock market people euphemistically call a "correction." It's just getting under way. And even if PPACA is struck down, the process will continue. Reversing what "Obamacare" has begun is as futile as trying to push a baby backward in the birth canal. It ain't gonna happen.