Tuesday, March 31, 2009

Consumers Need Independent Healthcare Pricing Information

Consumers continue to need independent sources for healthcare pricing information and the need is growing. Consumers are paying more and more out of pocket for their own care with increasing deductibles, co-pays, and co-insurance; Consumer Driven Health Plans (CDHP) plans and Health Savings Accounts (HSA); and the growing ranks of uninsured as the economy weakens. The healthcare industry continues to fail the consumer in providing pricing transparency. And recently, we see more evidence that some healthcare companies are crossing the line to actively disadvantage those paying for care.

The first example comes from the pharmaceutical industry as a settlement was announced between Baxter Health Corporation and the State of Wisconsin. Baxter allegedly reported average wholesale prices (“AWPs”) to pricing compendia for identified drugs that were grossly inflated and did not reflect the actual average wholesale prices. The inflated reports lead to increased costs for those purchasing the drugs. Baxter settled the lawsuit for a total amount of $1,050,000.

The settlement can be found here. Thirty five other pharmaceutical manufacturers have been charged as well.

The second example comes from California where The California Medical Association, American Medical Association and individual physicians have filed a lawsuit against WellPoint. The suit alleges that WellPoint colluded with Ingenix, a unit of United Health Group, on a price-fixing scheme that relied on an obscure database to set artificially low reimbursement rates for out-of-network care. "Health insurers are data manipulating to set rates artificially low, forcing patients to pay more than they bargained for when they go to a doctor of their choice," said Dr. Dev GnanaDev, CMA president.

Patients need to be careful consumers of the healthcare system. Prices vary a lot, even when patients stay in their insurer's network. When possible, patients should always ask about price before they get services. Then make sure the price you are offered is reasonable and fair. You can find fair prices for many healthcare services at the free consumer website: www.healthcarebluebook.com.

Tuesday, March 3, 2009

The Cost and Quality of Imaging

The New York Times raises awareness of the variation in quality for imaging studies such as CT and MRI; however they miss some of the most important issues to improve quality and costs.

First, Insurers don't pay the same price for imaging regardless of where it is done. Most insurers pay different providers different prices, even in the same market for the same services. This is a fact that hurts even those patients with insurance. Pricing of MRIs and other tests even within a single market and for a single insurer usually vary a lot. We recently helped a patient schedule an MRI. The first imaging center wanted $2,500, by calling around we found a high-quality center that charged just under $500. This dropped the patients 20% coinsurance amount from $500 to $100.

Second, paying a higher price for your healthcare does not mean you are getting higher quality care. Often the opposite is the case. Many high volume centers that do it right the first time will also have lower costs for patients.

And most importantly, when patients don't ask about price they usually don't ask about quality either. When patients engage in choosing a provider they tend to ask about both cost and quality.

I suggest that any time you need to have a test, surgery, procedure, etc. you shop around. The Healthcare Blue Book can tell you what the fair price for a service is in your market. Then you can call several facilities in your area and ask what type of machine will be used, how old it is and what the cost is.

Just as consumers must ask questions about quality, they also need to ask questions about price.