Let’s start a debate-squeezing the health care cost balloon

Here goes, I think the entire process of discounted fees, networks, drug rebates, etc. is nonsense and serves only to distort the true cost of health care and raise the costs for all Americans. 

Not only do those who cannot take advantage of the discounts get hurt by paying more, but one has to assume that prices are inflated to partially offset the cost of giving discounts and rebates.   My wife recently had a sleep study, the fee charged was $6,000, the fee accepted as payment in full was $1539.00  What sense does that make?  What is the true cost?  Is my discounted fee offset by some poor soul paying the $6,000?  Is the $1539 the result of good negotiating or leverage on the part of the plan administrator, does another plan pay $2,500 or some other “discounted” fee?

The federal government forces drug companies to provide rebates if they want to sell drugs to government entities, is that a true savings or does the price of the drug increase to make up the loss via the rebate?

I don’t know all the answers but I do know that when you squeeze a balloon it simply expands in another direction.  Is there any reason to believe that trying to artificially squeeze the price charged for health care by any number of different government entities and scores of health insurance companies provides any different result?  I think not!

What we need are national fair price schedules adjusted for any number of factors by areas of the U.S.  This doesn’t mean that fees are fixed by the schedules, but rather that a fair price including profit is a guideline so everyone can see whether they are receiving a fair deal, a good deal or are being ripped off.  Let’s say the fair geographically adjusted price for anesthesia in New York City is $300 per fifteen minute interval for X procedure.  Consumers and insurers will expect to pay that fee, if they are charged less than that physician is more competitive, if they are charged more they make the decision to use or not use that provider.  There are no participating or non participating providers, a patient will always be on the hook for fees above the schedules.  If they pay 20% of a charge they pay 20% of the actual fee charged, at, below or above the scheduled fee.  If the participants in a group plan fail to select providers at or below the guidelines, then their premiums will be higher than other groups.  The power shifts from the provider or insurer to the patient.  In the case of employer plans, employers could set their contribution using premiums that are adjusted based on the use of the fair price schedules.  Thus the plan participants would pay more out of pocket and more in premiums if they do not exercise discretion in selecting providers.

Needless to say the fair price scheduled fees would be widely published and available to all and regularly adjusted, but at rates closer to general COLI. 

All providers, including hospitals could maximize their profits by becoming more efficient, by charging less than the guidelines they could attract new customers, those providers who believe they add additional value for higher fees could make their case and attract customers that way.  The vast majority of providers would be free of the hassle of networks, discount negotiations, contracts and the like as would insurance companies who would also have an increased incentive to compete on their own efficiency and not external  pricing structures.

Are there gaps in all this, probably.  Will it take time for providers and consumers to adjust, certainly.  However, it can’t take any longer or have more faults than our current versions of health care reform, plus it appears to provide desirable incentives for all participants in the health care system, and it puts consumers in the “affordable” drivers seat.

blogsurfer.us