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Two Important Points!

Stanley Feld M.D.,FACP,MACE

1. Physicians and hospitals bill their retail prices with every claim form. They receive and accept Medicare prices as published. They have also negotiated deeply discounted prices with the insurance companies which they accept. An uninsured person, like Denise, has only seen the providers’ retail price. She could negotiate that fee before the service was rendered if she had a choice of provider. She could negotiate the price after service was performed if she knew the discount fees that the providers accepted. This is the best that she could do at the moment. Once everyone can buy insurance on a level playing field she will do much better. I will explain how, in my view, the medical savings account should be set up to be affordable to everyone, profitable to everyone, and driven by free market forces with freedom of choice for everyone. The model will lead to less people uninsured. It will also lead to a decrease in healthcare costs, because of a reduction in chronic disease complication rate.

2. In my blog, a Simple Solution to the Problem of Price Transparency some readers had the impression that I was advocating Price Control. I am a firm believer than Price Controls do not work. Price Controls in my view only create bigger problems.

The solution is competitive pricing. If a physician or hospital has a better product at a higher price, they will not lose their market share. One needs only to look at Neiman Marcus. If the product is similar the higher price product has a problem. The impartial web site will give that practice or hospital the opportunity to defend his price and in fact, prove its value to the consumer. They could publish their qualifications as well as medical and financial outcomes on the site and differentiate their value from the average.

In order to get that information, the providers will have to have a functioning electronic medical record (EMR). They could then have the opportunity to link medical and financial outcomes to cost and prove their value to those who want the superior product. Presently, there is little motivation for physicians or hospitals to have an electronic medical record. There is little incentive to buy one because presently there is no reward for having an EMR. The only incentive is a government mandate. However, mandates never seem to work. In addition, with the reimbursement declining it is difficult for a physicians or hospitals to understand the value of EMRs to be motivated to make the capital outlay necessary to purchase an electronic medical record. Many times these EMRs take years to install and function properly. Another barrier is the pain of converting to an EMR. The providers are tied also to a never ending costly service contract. The service from the EMR provider sometimes does not solve the problems that arise. In the past, many of us have spent large sums on the false promise of a significant payback. The false hope inhibits us from making an additional large investment that might not work well.

I will go into these problems and my proposed solution in the near future. Presently, one can start to see the depth and breadth of the problems the healthcare system has faced and the dysfunctional responses of stakeholders to the immediate problems. Their responses simply served to create greater problems for the healthcare system. The new problems generate further problems.

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