2013
Ok, some hospitals charge $10 for an aspirin. That charge is outrageous, it’s not related to cost and does not represent a fair markup. So what? Does making the price more transparent to patients do anything to control costs?
Recently someone (actually my son-in-law) challenged me to not just comment on what is not working, but to make suggestions for changes that will work. Here goes, but I have to warn you this is radical stuff for 2013 and the age of dysfunctional politics and left and right demagogues.
We need to do two related things to change the system. First, scrap the notion of participating provider. This means eliminate all networks, all negotiated fees by all health insurers and the government. Second, all insurers and individuals are charged and insurers consider eligible the same fee for the same service. That includes Medicare and Medicaid.
These changes will make all prices transparent and allow for a fair assessment of costs, lower the administrative costs for insurers, allow for true competition among insurers (and more important, providers) based on relevant expense control, encourage efficiency such as integrated electronic medical records and allow patients to truly know their potential out of pocket cost in advance.
Once this is established (probably on a regional basis), future increases in fees are negotiated collectively by all parties or tied to some predetermined measure. Linking individual fees this way does not automatically affect income because providers are left to compete on quality and efficiency and therefore can benefit from patient volume.
However, that leaves the problem of the incentive to simply provide more care to make more money. The answer here is the one people don’t want to hear … managed care … in all its forms, including the relatively new Accountable Care Organization. Somebody other than one patient and one doctor must participate in the overall management of the patient’s care both in terms of cost, but more importantly quality.
The key is aligning competing incentives on a level playing field. You can’t deal with pricing without dealing with utilization. You can’t deal with utilization without dealing with a system largely rewarded based on volume. [Note: part of the answer is also moving away from fee-for-service which we are starting to see as more doctors become employees as opposed to private practice]
From Kaiser Health News
Brill: Health Law Won’t Bring Prices Down For Patients
By Alvin Tran
JUNE 18TH, 2013, 4:32 PMAt a Capitol Hill hearing Tuesday, journalist Steven Brill, who examined the issue of the high cost of health care in a much quoted March 2013 Time magazine article, told Senate Finance Committee members that President Barack Obama’s health care law will do very little to lower prices for consumers.
Joined by a panel of health policy experts at the hearing to explore ways to make health pricing more transparent, Brill said that while he views efforts to disseminate prices for health services to consumers favorably, he believes that increasing transparency has its limits. “[Transparency] starts the conversation about prices that we didn’t have in the debate over Obamacare. It’s only a start,” Brill said. “Obamacare does nothing about these prices. Nothing to solve the problem – Zero.”
In his article, Brill looked at several patients with inadequate insurance and went through their medical bills line by line to explain why their care was so expensive. Among the many reasons he identified were massively inflated charges for common drugs and services and the hospital chargemasters that bore little resemblance to true costs.
QUINNSCOMMENTARY 