A recent article by Susan Livio highlights the billing practices of NJ hospitals. Such practices have them billing a lot more than many other hospitals in other states.
National health care economist Graham Atkinson said concerns are well-founded. New Jersey hospital charges are 4.1 times higher than what it costs to treat patients — far exceeding the national average of 2.8 times above cost, he said, based on American Hospital Association data.
A report put out by the New Jersey Health Care Quality Institute shows the impact of the high prices and the state's policy on billing.
While state laws insulate some patients from the impact of hospitals' full charges, many patients are still paying way too much. For example, if a single patient makes $32,000/year and receives an appendectomy at Elmer Hospital, he would pay just $4,797. However if that same patient happened to make $52,150/year the price would jump to over $43,000. So if one patient makes $20,000 more than another one, then they would pay over $38,000 more for their care (or 9 times more).
By comparison the Healthcare Blue Book has a fair price for the procedure of approximately $12,000.
Given the high prices charged by many NJ hospitals, patients need to be particularly careful when seeking hospital care.
Thursday, December 17, 2009
Saturday, December 12, 2009
Everything Old Is New Again
Blue Cross Blue Shield of Massachusetts Inc. recently announced a deal covering 60,000 members of the Caritas Christi Health Care system. The new payment arrangement is touted as one of the country's largest experiments in fundamentally changing the way doctors and hospitals are paid.
The contract includes a so-called global payment system in which the hospitals will be paid fixed amounts based on the estimated annual costs of patients’ care instead of the fee-for-service system in which providers bill insurers for individual visits and procedures. It also includes incentives to improve the quality and affordability of care.
Not to take anything away from a health plan attempting to address the ills of fee for service incentives, but the new system has an old name: capitation.
Capitation payment systems have been used in many forms for many years. However capitation has not become the predominant payment system in US healthcare because it shifts the provider incentives from doing too much to potentially doing too little. Providers want to deliver good care and be compensated in a reasonable manner. Asking providers to be the arbiters of the value of treatments puts them in an uncomfortable, if not impossible, position.
Patients should decide the value of treatment options. Different patients will make different decisions.
To actually make a fundamental change the current healthcare system, health plans need to support pricing transparency and plan designs that let patients have some 'skin in the game' as they make decisions.
Related articles:
WSJ
Boston.com
The contract includes a so-called global payment system in which the hospitals will be paid fixed amounts based on the estimated annual costs of patients’ care instead of the fee-for-service system in which providers bill insurers for individual visits and procedures. It also includes incentives to improve the quality and affordability of care.
Not to take anything away from a health plan attempting to address the ills of fee for service incentives, but the new system has an old name: capitation.
Capitation payment systems have been used in many forms for many years. However capitation has not become the predominant payment system in US healthcare because it shifts the provider incentives from doing too much to potentially doing too little. Providers want to deliver good care and be compensated in a reasonable manner. Asking providers to be the arbiters of the value of treatments puts them in an uncomfortable, if not impossible, position.
Patients should decide the value of treatment options. Different patients will make different decisions.
To actually make a fundamental change the current healthcare system, health plans need to support pricing transparency and plan designs that let patients have some 'skin in the game' as they make decisions.
Related articles:
WSJ
Boston.com
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