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The Charade Of Price Transparency

Stanley Feld M.D., FACP, MACE

The government and the healthcare insurance industry have been collecting cost data for years. The data is not reimbursement data.

The government has released a hard to understand database on what they pay per procedure and treatment.

However, the database is very hard to get to and very difficult to understand.

Theoretically one can discover what clinics charge for an MRI and what hospitals bill for childbirth. It is another thing to find out how much they get reimbursed.

New Choice Health’s web site provides hospital charges for some procedures and treatments but it is difficult to navigate. You have to give the site a lot of personal information before you can see anything.

New Choice Health published the following range of prices charged in the Dallas area.

The title of the chart is the Dallas costs for top procedures. The title is totally misleading to the public. The prices charged have nothing to do with the prices negotiated between healthcare insurance companies or the government as the third party payers with the payee being the hospitals, physicians or others  providers.

The chart is meaningless. It is a bogus attempt at transparency. It gives the impression that people are overcharged by physicians and hospitals.

It has nothing to do with what reimbursement is by the third party payer.

 At times it seems to me as if the deeply discounted reimbursement to physicians and hospitals are too much for the service rendered.

Surgeons do better than Primary Care Physicians. Hospitals do much better because of inflated revenue codes.

The easiest example of inflated hospital revenue codes to remember is the price paid by third party payers for chemotherapy in a hospital outpatient setting compared to a private practice setting.

  Difference in prices for 8 27
The charade of this kind of price transparency does not relate to patients’ problems with the healthcare system.

A patient calling the hospital for prices for a certain surgery with a certain insurance company is still going to be in the dark. Patients have to make many calls and go through many bureaucratic barriers to understand their liability.

These continued barriers and pretense of transparency lead to the erosion of confidence in our entire healthcare system., the Texas Hospital Association’s pricing site, is a very useful comparison tool.”

This is what is published in the traditional mass media. It is not.

Consumers cannot get the information they need for their individual case.

With Texas Price Point you can receive the average retail price for specific hospital procedures, total patient mix for inpatient care between Medicare 46.4%, Medicaid 7.6%, and other insurance 46%.

Medicare pays 28% of the average retail fee, Medicaid pays 27% and the private insurers pay 41% of one specific procedure.

The bad debt for that procedure is 2.36% of the total bill and charity is 3.446% of total charges.

These numbers are to the benefit of hospitals and the third party payers. They do not help the patients determine their liability for a bill with insurance payment and their deductible..

It took me about twenty minutes to glean this information from the web site for only one disease entity.

The Internet has provided some transparency and choice in drug pricing. However, it has a long way to go.

The Texas Price Point web site does not do an individual patient any good.

It tells the hospital that private insurance pays more than Medicare or Medicaid. If the hospital was smart it would increase the number of private insurance patients over Medicare and Medicaid patients to make more profit.

I think the hospital knows that without the Big Data on the web site.

The healthcare system has a long way to go to have pricing be transparent to individual consumers.

 The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.  

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