Stanley Feld M.D.,FACP,MACE
There are many different ways of looking at a large elephant. The cost of the healthcare system is similar to the large elephant in the room.
There are so many ways one could look at healthcare costs. A person can become crazy trying to solve the ever increasing cost through the prism of one’s view.
The information available can be dizzying. There are so many ways of looking at the problem. Much of the information is untrue or incomplete.
I have provided examples previously in which patients tried to find out fees from hospital systems for certain procedures. The fees have been totally opaque. Hospital systems should not be allowed to withhold fee information.
Price transparency is important because it has the potential to set up a system of competition.
The healthcare insurance companies could be a good source of this information because they are billed by the hospital systems.
The big data they publish is essentially worthless because they pay only the contracted price the hospitals and physicians negotiate with each insurance company.
Prices for the same diseases are differ all over the place in hospitals close to each other in California.
However these retail prices are meaningless. This is not price transparency.
The hospital is only going to receive the contracted price from that particular insurance company.
The variation in “retail price” only reflects a variation of service that hospital system performed in each particular disease category.
How much of that service needed to be done for the hospitals population is an important question. The comparison is not necessarily apples to apples.
What was the hopital system’s actual cost for that services?
How did they arrive at its billing?
How much is waste and bloated administration costs and how much is actual medical care?
How did that hospital system calculate the profit for that service?
If this was real price transparency we should be told how much the hospital system paid was for that actual service.
The WSJ article states “It's a simple idea, but a radical one. Let people know in advance how much health care will cost them—and whether they can find a better deal somewhere else.”
This is almost as foolish a question as the chart of the varying hospital prices for various diseases.
If consumers have sudden onset of chest pain they need medical care immediately. The consumer does not have the luxury of shopping for the best price in the area. Those consumers need to be treated at the closest hospital.
Medical bills are outrageous. They are also incomprehensible. In many cases the negotiated reimbursement varies within various healthcare insurance companies.
Hospital systems submit these high prices simply to get the most money from the various negotiated reimbursement deals they have accepted. They do not individualize the prices negotiated with each insurance company because their computer systems can’t handle it.
Physicians do the same thing. They accept the negotiated price for reimbursement by the various insurance companies even though their retail prices are higher.
Occasionally they bill an uninsured consumer. Then the hospital system and physician can collect their retail fee from an uninsured consumer. There is seldom any negotiating to benefit the consumer.
This is absurd but true.
“Unlike other industries, prices for health care can vary dramatically depending on who's paying. The list prices for hospital stays and doctor visits are often just opening bids that insurers negotiate down.”
“ The deals insurers and providers strike are often proprietary, making comparisons difficult. Even doctors are generally clueless about what the tests, drugs and specialists they recommend will cost patients.”
The primary stakeholders in the healthcare system are consumers and their physicians. If consumers and physicians cannot get the prices of the services they are about to use they should demand them or use another vendor.
The declaration of proprietary prices sounds very official and mysterious.
Price transparency is common in most industries. Price transparency stimulates competition with lower cost and better quality.
Price transparency is rare in health care. The "charges," "prices," "rates" and "payments" are all opaque. They bear little relation to actual costs.
It is essential that consumers drive the requirement of providers to publish their prices in order to get customers. The government has no interest in doing it.
If consumers were spending their own money, most consumers would demand price transparency.
If a third party is paying the bill for healthcare, consumers would have no interest in the price of care or controlling the price of care.
“Last year, 38% of Americans with employer-sponsored insurance had a deductible of $1,000 or more—up from 10% in 2006, according to the Kaiser Family Foundation.”
Obamacare is expanding the services required for insurance policies. The services include unnecessary coverage for a lot of potential participants. Both health insurance premiums and private insurance require coverage of unnecessary services. President Obama is also taxing the insurance companies for every insurance policy they sell.
These additional costs are passed on to consumers without consumers’ knowledge in this price opaque world of healthcare.
Premium prices are skyrocketing; deductibles and copays are also increasing.
Obamacare mandates people to buy these healthcare insurance policies.
At the same time the silver and bronze plans created by the Obamacare (Affordable Care Act) carry average family deductibles of $6,000 and $10,386 respectively as opposed to $1,000 pre Obamacare.
More than half of bronze plans also require patients to pay 30% of doctors' fees, according to health-information site HealthPocket.com.
Obamacare and all its regulations are not so affordable to anyone making over $50,000.
Everyone earning under $50,000 receives a subsidy from the government. Over 50% of the people earn under $50,000 dollars. These consumers do not have incentive to shop for cheaper medical care.
People making over $50,000 are trapped. The middle classes’ discretionary income is being reduced by the very program President Obama (Obamacare) promised to protect.
President Obama doesn’t want a solution to the healthcare system. He wants control of the healthcare system. He wants the government to be in control of the entire system.
Only then can he tell consumers what medical care they can and cannot have.
When the present Obamacare system implodes people will beg the government (payer of last resort) to bail them out even at the price of freedom and independence.
The next step will be to control all of the freedoms that Americans have left.
The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone
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