Stanley Feld MD,FACP,MACE

Kinky Friedman, are you listening?

The fees paid to all physicians and hospitals for services and procedures should be published on the Internet by an impartial body. Alongside the multiple wholesale fees should be the providers’ retail fee schedule. This would create a system of complete fee transparency. Insurance companies negotiate fees with each provider. The fees of one provider might be different than the fees of another vendor. The posting of these prices on the internet could be required by each State Insurance Board before an insurance company could obtain a license to sell health insurance in each state for each insurance product. This would result in a transparent range of fees from retail to wholesale per insurance company and per provider. Justification for the range of fees could be explained on the web site. Only then would the prices and fees be transparent to the consumer. The consumer (patient) would have adequate information to make a decision to pick the provider of his choice.

Medicare has published fees on the Internet. Price Transparency in Medicare is the goal. However, it has to be simplified. The fees are difficult to figure out.

This is a simple process. It would create competitive pricing among insurance carriers, and providers. The format could be the same as C/Net for electronics purchases. Patients could also add their critique of their care. In High Noon, J.F. Rischard suggests we are merely at the onset of solving problems through the use of the internet. The patients (consumer), along with a little help from the government, can precipitate this change.

Even if the governor of each state required this posting of the insurance industry, it would have little impact on the uninsured. However, Price Transparency is essential if Consumer Driven Healthcare is going to fulfill its promise. It would be a very important step in Repairing the Healthcare System. It would get patient participation in decision making about their care.

Dr. Westbrock mentioned that the insurance industry has subverted the HSA concept. He is correct. The Health Saving Account concept in its original form was called Medical Savings Accounts (MSA). The original concept was designed to motivate the patients to be a price conscious of their medical care purchases. Price Transparency would be the vehicle they would use to choose. More of this is the future.

Please consider Price Transparency in light of my earlier statements. Presently, the healthcare system is broken because all of the stakeholders’ incentives are misaligned. Everyone has adjusted to protect his own vested interest at the expense of the patient, the most important stakeholder. Everyone is in pain at the present time because of the systems dysfunction. Everyone can adjust if the heat goes up slowly. The price simply goes up. Everyone will talk about the problems but no one seems to fix them as they should be fixed. The goal of this blog is to inform the patients and future patients of the problems and empower the patients and future patients to act through their local and state governments to create the necessary alignment. The goal is to serve all of the stakeholders’ vested interest. However, the patients and future patients have to get a good deal rather than a raw deal.

Price transparency should be on an impartial web site. The web site should be available for everyone who chose to subscribe free of charge. The patient should have the ability to judge the services of the insurance company and physicians. Physicians, insurances companies and other stakeholders should have the ability to reply if they chose to. A web site such as CNet would be great for this endeavor. The technology is available.

This is not rocket science. Insurance companies, physicians and hospitals have a data base they could download to the impartial site. They could be compelled to participate by each state. It is time to level the playing field for the patient and physician.

Kinky Freidman could make one tenet of his healthcare policy. He would be wildly applauded. As the new governor of the State of Texas he could require the Texas State Board of Insurance to demand this data. The action is neither a Democratic Party nor Republican Party action. It is a common sense action

Kinky’s claim is he is not owned by anyone except common sense. This seems like common sense to me.

Go for it Kinky!

Remember Price Transparency is only going to solve part of the problem. The rest of the solutions to Repairing the Healthcare System will follow.

Stanley Feld M.D.,FACP,MACE

Last August Aetna triumphantly announced “the first program of its kind to let consumers find out what they can expect to pay at the doctor’s office before going in for a visit. This means for the first time, consumers can better gauge their out of pocket health care expenses by having online access to the actual discounted rates for up to 25 of the most common office-based services offered by their own primary care or specialist physician. Aetna will publish “actual discounted rates specific to their health plan for office visits, diagnostic tests and minor procedures.”

This does not help Denise at all with the fees she had experienced. She did not have Aetna insurance with the specific Aetna insurance plan that Aetna published fees for. Additionally, if she had access to the fees, she would be in no position to negotiate the fee with her vendor. How can the non insured get in a position to negotiate the fee? How did Aetna arrive at the fee to pay the vendor? Aetna announced this innovation in August 2005. Their goal was to try to capture the growing Health Savings Account Market in the Cincinnati area. The procedures and services were limited to the 25 most used by participating physicians. No expansion has occurred since August 2005, as far as I can tell. It does not apply to all their plans and one needs an identifying code and password to get the information published.

Is this price transparency? In my opinion, this is a smoke screen to appease a growing demand for price transparency. Some would say it is a great start. Aetna’s price transparency was announced in August 2005. It is now July 2006. We need price transparency for everyone. Their has to be built in negotiating power. The range of fee agreed on needs to be published. The reason for the range of fees needs to be understood by the consumer.

The AMA nailed it. However, their statement is so subtle that the main message can easily be missed. The AMA had a positive approach , “In support of consumer-directed healthcare and an end to the mystery of medical prices, the AMA today called on the health insurance industry to end efforts to conceal their pricing systems for medical services.”
The AMA goes on to say “ There is no legitimate rational behind health insurers refusal to provide their payment policies and actual costs to patients and physicians” It serves only as a means for the health insurance industry to avoid accountability.”

The key words in the preceding statement are the payment policies and actual costs of the insurance company. In other words, how does the insurance industry price their product to the consumer? How do they price their payments to the providers, the physicians and the hospitals? What are their actual costs in order to service the product they sell to the consumer? How do they calculate these costs? Do they calculate the cost by factoring in multimillion dollar salaries to executives? For patients and potential patients this is information it would be nice to know.

The AMA goes on to say “insurance industry does not provide patients with an entire picture of insurers pricing. Patients are being provided with incomplete and selective information” This is the information that would represent true price transparency.

I received this stunning note from a fellow endocrinologist, Dr David Westbrock from Columbus Ohio. Dr. Westbrock has run for congress twice to defend patients’ and physicians’ rights. He almost won the second time. You will hear more from Dr. Westbrock in the future. However, this was an immediate reply to the price transparency issue.

Stanley,

Dave Westbrock

Physicians as well as patients have problems with price transparency.
Next the Simple Solution to Price Transparency

Stanley Feld M.D.,FACP,MACE

Many of you were shocked at the discrimination of pricing Denise experienced. In fact, Denise was not aware of the wide pricing range until she experienced it. I think most readers are not aware of the range of pricing for procedures.

When a physician sends you for a test that you discover is overpriced compared to the same test at other facilities who do you get angry at? The answer is the physician. What does that do to the physician-patient relationship? The patient should not be angry at the physician because I think most physicians do not know the differences in pricing between facilities.

Denise’s letter is one of many examples of the broken Healthcare system. It illustrates unfair pricing to a primary stakeholder with no insurance. The average consumer (patient) would never know it unless he experiences it as Denise did. However, the mechanics of pricing is totally logical to me as I trace the causes of the dysfunctional Healthcare System.

For physicians, it is essential that the approach to a patient’s illness is not to put a patch on a symptom and hope it goes away. Our job is to find the underlying cause of the problem, and fix it. Only then will the symptoms be relieved. Treating the symptom works short term, but you usually end up with other symptoms, or complications that are worse in the long term. Sometimes, the complications of chronic disease are non repairable.

We can all understand Denise’s pain and frustration. Is the solution to treat the symptom? Not if we are going to have a long lasting effect. We must treat the source rather than the symptom in order to repair the Healthcare system. First, we must understand the historical sources of the problem.
I submit that price transparency is an important patch to treat a bad situation. Everyone has now jumped on the need for price transparency. Aetna has announced its prices will be transparent. The AMA has called for price transparency as has the government. In the past, physicians were told that “they said” price transparency was an antitrust violation. I will have more to say about “they” in the future.
Price transparency is essential, but it alone is not going to cure the problems of the Healthcare system. Multiple other defects must be understood and cured simultaneously. The changes must have enforceable teeth, and apply to all the stakeholders. Price transparency should be directed to the primary stakeholder, the patient. The other stakeholders’ vested interests will fall into line with a simplified cost effective system as a result. Unfortunately, the only one who can force this change is the consumer and the exercise of “People Power”.