The House has 3 bills under consideration for promoting health care pricing transparency. Unfortunately, there is no commitment for moving the legislation through this year. And no bills introduced in the Senate yet.
The worst indication of where this may be heading came from Frank Pallone, chairman of the Energy and Commerce health subcommittee. “The concern I guess is about the unintended consequences of too much transparency,” he said. Apparently he believes such transparency will make prices go higher since Peter Orszag stated so back in 2008. If we assume that future health benefits will preserve the worst parts of the insurance models, then maybe that is possible.
However, if we look at private reform and adopt the newer benefit designs with consumerism, then we are much more likely to see prices fall as consumers engage in their care decisions.
Until the legislature brings meaningful pricing disclosure requirements, consumers can find fair price estimates for free at Healthcare Blue Book.
The three bill were summarized by California HealthLine
Bill Details
HR 4700: The bill -- sponsored by Rep. Steve Kagan (D-Wis.) without any Republican support -- would require hospitals, physicians, nurses, pharmacies, and a number of manufacturers and vendors to disclose publicly the prices they would charge patients. The HHS secretary would levy a fine on providers and vendors that fail to comply with the requirement (Ethridge, CQ Today, 5/6).
HR 2249: Cosponsored by Texas Reps. Gene Green (D) and Michael Burgess (R), the bill calls for transparency in hospital charges (Pecquet, "Blog Briefing Room," The Hill, 5/6). The legislation also would expand reporting requirements to all 50 states and require insurance companies to disclose out-of-pocket cost estimates for a number of medical procedures (Reichard, CQ HealthBeat, 5/6).
HR 4803: The proposal, sponsored by House Energy and Commerce Committee ranking member Rep. Joe Barton (R-Texas) with broad Democratic support, would cover ambulatory surgical centers serving patients who are not hospitalized after their operation ("Blog Briefing Room," The Hill, 5/6). It would require the centers, as well as hospitals and private and public health insurers, to disclose to their patients and customers information about the costs for services they provide and the items and services that they cover, respectively (CQ Today, 5/6).
See also comments at:
The Hill
Showing posts with label public policy. Show all posts
Showing posts with label public policy. Show all posts
Thursday, May 13, 2010
Sunday, May 2, 2010
Wisconsin Legislation for Price Transparency
In the fall of 2009 there were a lot of articles on 'facility fees' that are added to doctor's bills for office visits when the doctor works for a hospital.
Wisconsin is now considering requiring pricing transparency for the extra fees. Proposed legislation (AB 207) would require clinics that charge "facility fees" - meant to cover extra costs incurred by hospital-owned facilities - to tell people about them at the time they make appointments and to provide an estimate of what they will be.
Wisconsin has already passed one law to encourage pricing transparency, thought the law does not take effect until 2011. Wisconsin Act 146 requires hospitals and other health care providers to give patients a list of common procedures and what the provider charges for them, as well as what Medicare and insurers typically pay for them. This will provide some very useful information for patients.
In addition, Wisconsin is considering a law that would would require health care providers to give patients an estimate of the cost of any procedure, test or other service if it is expected to be more than $500. It would also require more disclosure to patients by insurance companies of the coverage amounts for certain medical services and estimates of out-of-pocket costs and costs for services from out-of-network providers. (Assembly Bill 539)
Wisconsin is now considering requiring pricing transparency for the extra fees. Proposed legislation (AB 207) would require clinics that charge "facility fees" - meant to cover extra costs incurred by hospital-owned facilities - to tell people about them at the time they make appointments and to provide an estimate of what they will be.
Wisconsin has already passed one law to encourage pricing transparency, thought the law does not take effect until 2011. Wisconsin Act 146 requires hospitals and other health care providers to give patients a list of common procedures and what the provider charges for them, as well as what Medicare and insurers typically pay for them. This will provide some very useful information for patients.
In addition, Wisconsin is considering a law that would would require health care providers to give patients an estimate of the cost of any procedure, test or other service if it is expected to be more than $500. It would also require more disclosure to patients by insurance companies of the coverage amounts for certain medical services and estimates of out-of-pocket costs and costs for services from out-of-network providers. (Assembly Bill 539)
Friday, April 2, 2010
AHIP Calls for Transparency
The consequence of health reform continue to unfold.
One interesting development is the response by health plans to the HHS request for transparency of price increases.
AHIP wrote a letter to HHS suggesting that health plans would be glad to provide transparency into rate increases, and would like the same standard to be applied to providers.
The letter reads in part:
"As you request transparency from our members, we urge you also to consider pursuing transparency for hospitals, physicians, pharmaceutical and device companies, and other suppliers. Consumers should have data on year-to-year price increases in these sectors, as well as quality performance information. We believe this is an opportunity to ask of all other sectors what you are asking of health plans. Pursuing transparency in these sectors is essential both to educate consumers about what drives health care costs and to ensure that patients and their doctors have the information and decision support tools they need to make informed decisions in accessing care and in choosing among providers and care options."
Asking health care providers to explain price increases implies that consumers know what prices are to begin with.
What an excellent idea.
The Healthcare Blue Book welcomes the idea that HHS will encourage all providers to provide real pricing transparency to consumers.
One interesting development is the response by health plans to the HHS request for transparency of price increases.
AHIP wrote a letter to HHS suggesting that health plans would be glad to provide transparency into rate increases, and would like the same standard to be applied to providers.
The letter reads in part:
"As you request transparency from our members, we urge you also to consider pursuing transparency for hospitals, physicians, pharmaceutical and device companies, and other suppliers. Consumers should have data on year-to-year price increases in these sectors, as well as quality performance information. We believe this is an opportunity to ask of all other sectors what you are asking of health plans. Pursuing transparency in these sectors is essential both to educate consumers about what drives health care costs and to ensure that patients and their doctors have the information and decision support tools they need to make informed decisions in accessing care and in choosing among providers and care options."
Asking health care providers to explain price increases implies that consumers know what prices are to begin with.
What an excellent idea.
The Healthcare Blue Book welcomes the idea that HHS will encourage all providers to provide real pricing transparency to consumers.
Sunday, March 21, 2010
Health Reform and Consumerism
Regardless of your position on the current health reform, it will soon impact consumerism movements that have been shaping the healthcare landscape and helping to hold prices down.
Consumerism provides individual patients with some economic responsibility as they make decisions regarding their healthcare; hoping to strike a balance between making care affordable but also making sure those paying for care are getting value for the resource they spend.
The reform legislation will probably change over time, but as of today, based on the Senate's bill; here are some of the impacts on consumerism:
Promoting consumerism:
Linking payments to hospitals to providers based upon quality of care instead of volume of services (2012).
Linking payments to physicians to providers based upon quality of care instead of volume of services (2013).
Taxing high cost insurance plans (2013).
Increasing the threshold for claiming itemized deductions for medical expenses (2013).
Limiting Consumerism:
Eliminating Lifetime Limits and Restricting Use of Annual Limits (2010).
Covering Preventive Health Services at 100% (2010).
Reducing the Part D “Donut Hole” or Coverage Gap (2010).
Limiting Health Flexible Savings Account Contributions (2011).
Eliminating Annual Limits on health insurance coverage (2014).
It will be interesting to see how the final legislation changes over time and what its ultimate impact will be on consumerism.
Based upon patient usage of the Healthcare Blue Book, we know that many patients are very capable of finding high quality care at reasonable prices when they have an incentive to do so.
Consumerism provides individual patients with some economic responsibility as they make decisions regarding their healthcare; hoping to strike a balance between making care affordable but also making sure those paying for care are getting value for the resource they spend.
The reform legislation will probably change over time, but as of today, based on the Senate's bill; here are some of the impacts on consumerism:
Promoting consumerism:
Linking payments to hospitals to providers based upon quality of care instead of volume of services (2012).
Linking payments to physicians to providers based upon quality of care instead of volume of services (2013).
Taxing high cost insurance plans (2013).
Increasing the threshold for claiming itemized deductions for medical expenses (2013).
Limiting Consumerism:
Eliminating Lifetime Limits and Restricting Use of Annual Limits (2010).
Covering Preventive Health Services at 100% (2010).
Reducing the Part D “Donut Hole” or Coverage Gap (2010).
Limiting Health Flexible Savings Account Contributions (2011).
Eliminating Annual Limits on health insurance coverage (2014).
It will be interesting to see how the final legislation changes over time and what its ultimate impact will be on consumerism.
Based upon patient usage of the Healthcare Blue Book, we know that many patients are very capable of finding high quality care at reasonable prices when they have an incentive to do so.
Sunday, February 28, 2010
Why do we pay more money without getting better quality care?
Value is one of the most important missing topics in the health reform debate.
We might not be so concerned with how much health care costs or how much of our national budget gets devoted to health care, IF we felt we were getting good value for our money. But the fact is that we all know we aren't getting a good value. We see prices continue to rise faster than inflation and very often that is accompanied with lower levels of service, less time with our doctors, etc.
There have been some studies focused squarely on this issue. I have commented before on the Health Affairs article last year.
Now comes a nice report from Massachusetts that examined the costs of healthcare and how they relate to quality.
What did they find?
Their preliminary review revealed serious system-wide failings in the commercial health care marketplace which, if unaddressed, imperil access to affordable, quality health care.
Their investigation has shown:
- Prices paid by health insurance companies to hospitals and physician groups vary significantly within the same geographic area and amongst providers offering similar levels of service.
- Price variations are not correlated to (1) quality of care, (2) the sickness or
complexity of the population being served, (3) the extent to which a provider is
responsible for caring for a large portion of patients on Medicare or Medicaid, or (4) whether a provider is an academic teaching or research facility. Moreover, (5) price variations are not adequately explained by differences in hospital costs of delivering similar services at similar facilities.
At The Healthcare Blue Book our work with employers reveals this fact frequently. We routinely see employees paying 500% more than necessary for common services while getting no better (and sometimes lower) quality of care. These are prices paid to in-network providers; and prices that ultimately are paid for by the employer under their health benefit costs.
The more research the better, but each study points in the same direction: there is a lot of opportunity for employers and employees to lower costs and raise quality.
We might not be so concerned with how much health care costs or how much of our national budget gets devoted to health care, IF we felt we were getting good value for our money. But the fact is that we all know we aren't getting a good value. We see prices continue to rise faster than inflation and very often that is accompanied with lower levels of service, less time with our doctors, etc.
There have been some studies focused squarely on this issue. I have commented before on the Health Affairs article last year.
Now comes a nice report from Massachusetts that examined the costs of healthcare and how they relate to quality.
What did they find?
Their preliminary review revealed serious system-wide failings in the commercial health care marketplace which, if unaddressed, imperil access to affordable, quality health care.
Their investigation has shown:
- Prices paid by health insurance companies to hospitals and physician groups vary significantly within the same geographic area and amongst providers offering similar levels of service.
- Price variations are not correlated to (1) quality of care, (2) the sickness or
complexity of the population being served, (3) the extent to which a provider is
responsible for caring for a large portion of patients on Medicare or Medicaid, or (4) whether a provider is an academic teaching or research facility. Moreover, (5) price variations are not adequately explained by differences in hospital costs of delivering similar services at similar facilities.
At The Healthcare Blue Book our work with employers reveals this fact frequently. We routinely see employees paying 500% more than necessary for common services while getting no better (and sometimes lower) quality of care. These are prices paid to in-network providers; and prices that ultimately are paid for by the employer under their health benefit costs.
The more research the better, but each study points in the same direction: there is a lot of opportunity for employers and employees to lower costs and raise quality.
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
Wednesday, November 18, 2009
Facility Surcharge for Doctor Visits
Consumers must always be careful of hidden fees and unexpected charges when purchasing healthcare services. A new version of hidden fees has been gaining attention the past several months: Called "provider-based billing", there is a rule that allows hospitals that own physician practices and outpatient clinics that meet certain federal requirements to bill separately for the facility as well as for physician services as long as the bill all patients for it.
What does this mean? If you go to your doctor for an office visit, you expect to pay for the office visit. If you happen to go to a doctor that is owned by a hospital, then you may also be charged a "facility charge". According to Kaiser Health News facility charges can range from $25 to hundreds of dollars. Unaware consumers can be in for quite a surprise.
One of the troubling issues that results is the fact that this hidden billing has its largest impact on uninsured and self-paying patients. While the Medicare program allows hospital owned physicians to charge the facility fee, Medicare typically dictates a below market fee schedule for the physician services. Private insurers can also negotiate set rates that eliminate the facility fees. Self-pay patients are left paying the full amount of the physician bill plus the facility fees.
Given the recent increase in physicians joining hospitals as owned practices, the issue of facility fees is likely to grow.
For other reports on this see:
Cleveland Plain Dealer
USA Today
What does this mean? If you go to your doctor for an office visit, you expect to pay for the office visit. If you happen to go to a doctor that is owned by a hospital, then you may also be charged a "facility charge". According to Kaiser Health News facility charges can range from $25 to hundreds of dollars. Unaware consumers can be in for quite a surprise.
One of the troubling issues that results is the fact that this hidden billing has its largest impact on uninsured and self-paying patients. While the Medicare program allows hospital owned physicians to charge the facility fee, Medicare typically dictates a below market fee schedule for the physician services. Private insurers can also negotiate set rates that eliminate the facility fees. Self-pay patients are left paying the full amount of the physician bill plus the facility fees.
Given the recent increase in physicians joining hospitals as owned practices, the issue of facility fees is likely to grow.
For other reports on this see:
Cleveland Plain Dealer
USA Today
Sunday, November 8, 2009
$100M Healthcare Pricing Database
We have been following the NY attorney general's cases against Ingenix and large health insurance companies. The attorney general recently announces where the $100M in fines will go and what they intend to do with the healthcare data.
They will create a new Non Profit entity called FAIR Health that will be centered at Syracuse University. Other NY universities will share in the money and collaborate on the project.
FAIR Health will ultimately offer pricing information to consumers on a new website they intend to create. It should help consumers understand typical Insurance company reimbursement for out-of-network care. They hope to have the website up within one year.
You can view the attorney general announcing FAIR Health here.
They will create a new Non Profit entity called FAIR Health that will be centered at Syracuse University. Other NY universities will share in the money and collaborate on the project.
FAIR Health will ultimately offer pricing information to consumers on a new website they intend to create. It should help consumers understand typical Insurance company reimbursement for out-of-network care. They hope to have the website up within one year.
You can view the attorney general announcing FAIR Health here.
Wednesday, October 21, 2009
Public Option To Have Pricing Subsidy
Back in July we got a preview of the difficult situation of creating a Public Option that "competes fairly" in the market versus the hint that the Public Option might pay doctors below market rates.
Today the Washington Post reports that the House is planning a reconciled bill that "would include a government-run insurance plan that pays providers at rates tied to Medicare." Medicare rates are well below commercial market rates for most healthcare services.
This development is unlikely to promote pricing transparency. Medicare's current payment system sets most physician fees at a similar level which could foster transparency. However, it is very difficult for patients to determine what the specific fees will be before they receive care. This difficulty arises from complicated geographic adjustments and the fact that care levels, and therefore pricing, are generally determined after the care is provided.
In addition, Medicare's rules provide different payments to providers based upon place of service and many other factors. If you have a service performed at one hospital you will likely pay a different rate than if you had used the hospital across town. Have the service performed at an out patient facility and it could be much less expensive.
If consumers don't know what healthcare costs before they get treatment, it is very unlikely they will be able to help get more value for all the dollars they spend. Let's hope that whatever shape the final health reform bill takes that it will at least bring more transparency to the consumer.
Today the Washington Post reports that the House is planning a reconciled bill that "would include a government-run insurance plan that pays providers at rates tied to Medicare." Medicare rates are well below commercial market rates for most healthcare services.
This development is unlikely to promote pricing transparency. Medicare's current payment system sets most physician fees at a similar level which could foster transparency. However, it is very difficult for patients to determine what the specific fees will be before they receive care. This difficulty arises from complicated geographic adjustments and the fact that care levels, and therefore pricing, are generally determined after the care is provided.
In addition, Medicare's rules provide different payments to providers based upon place of service and many other factors. If you have a service performed at one hospital you will likely pay a different rate than if you had used the hospital across town. Have the service performed at an out patient facility and it could be much less expensive.
If consumers don't know what healthcare costs before they get treatment, it is very unlikely they will be able to help get more value for all the dollars they spend. Let's hope that whatever shape the final health reform bill takes that it will at least bring more transparency to the consumer.
Wednesday, October 7, 2009
FeelingFlu.com
It is hard to read the paper or watch the news without hearing something about the H1N1 flu (also called swine flu). But what should patients do? how can they understand their symptoms? Should they try to get the vaccine early on?
Now there is a really nice website devoted to helping patients understand swine flu and more importantly what they need to do. The site is found at feelingflu.com.
It is sponsored by A.D.A.M. who has a great reputation for providing consumer health information. This new website has a key feature that allows individuals to take a free online assessment. According to A.D.A.M. the proprietary, interactive tool uses a “self-triage” branching logic system to assess the individual’s symptoms and other information and then provides information about the most appropriate course and timing for treatment.
I encourage you to check out feelingflu.com
Now there is a really nice website devoted to helping patients understand swine flu and more importantly what they need to do. The site is found at feelingflu.com.
It is sponsored by A.D.A.M. who has a great reputation for providing consumer health information. This new website has a key feature that allows individuals to take a free online assessment. According to A.D.A.M. the proprietary, interactive tool uses a “self-triage” branching logic system to assess the individual’s symptoms and other information and then provides information about the most appropriate course and timing for treatment.
I encourage you to check out feelingflu.com
Monday, October 5, 2009
Too Much Care?
In the past couple of weeks health care writers have been warning about the pitfalls of too much care. Maybe they are priming the pump for the potential of healthcare rationing in the future? More likely they are revealing one of the areas that gets little attention but results in a lot of unnecessary expense.
A Washington Post article, In Delivering Care, More Isn't Always Better, Experts Say, explores the unnecessary care delivered each year. According to a 2008 report by New England Healthcare Institute, wasted expenditures total over $700 Billion every year.
The Wall Street Journal also addressed this issue recently: Getting Well: It's About Time. While we don't want patients to avoid necessary care, in many cases patients will get better own their own. For example, Americans spend approximately $1 billion every year on unnecessary antibiotics for viral infections. These antibiotics don't treat the illness and lead to antibiotic resistance.
The savings opportunities are large and they are real. However, it is unlikely we will achieve savings in this area unless we give consumers the incentives and education they need to make value based healthcare decisions.
A Washington Post article, In Delivering Care, More Isn't Always Better, Experts Say, explores the unnecessary care delivered each year. According to a 2008 report by New England Healthcare Institute, wasted expenditures total over $700 Billion every year.
The Wall Street Journal also addressed this issue recently: Getting Well: It's About Time. While we don't want patients to avoid necessary care, in many cases patients will get better own their own. For example, Americans spend approximately $1 billion every year on unnecessary antibiotics for viral infections. These antibiotics don't treat the illness and lead to antibiotic resistance.
The savings opportunities are large and they are real. However, it is unlikely we will achieve savings in this area unless we give consumers the incentives and education they need to make value based healthcare decisions.
Friday, September 25, 2009
Will Anyone Know the Price of Their Drugs?
While the Senate Finance Committee rejected a proposal requiring drug companies to rebate an additional $100 Billion over 10 years, the agreement reached earlier this summer still requires $80 Billion in drug rebates over 10 years.
Rebates are often difficult to track or understand and are not helpful for consumers that want price transparency.
If we are going to ask patients to be make cost conscious decisions about their care, we have to able to let them know how much that care costs. If patients are charged one price at the check out counter, but the government or insurance companies later get rebates on those drugs purchases; then the consumers really never know the true cost of their medications.
Maybe we should stop the rebate game as part of health reform?
An accurate, upfront price would be helpful for consumers.
To read more about the current politics around the rebates, see the NYT.
Rebates are often difficult to track or understand and are not helpful for consumers that want price transparency.
If we are going to ask patients to be make cost conscious decisions about their care, we have to able to let them know how much that care costs. If patients are charged one price at the check out counter, but the government or insurance companies later get rebates on those drugs purchases; then the consumers really never know the true cost of their medications.
Maybe we should stop the rebate game as part of health reform?
An accurate, upfront price would be helpful for consumers.
To read more about the current politics around the rebates, see the NYT.
Thursday, September 17, 2009
First Know the Problem, Then Fix It
This is the recommendation from the dean of Harvard Medical School, Dr. Jeffrey S. Flier. See his article here.
He suggests three problems that are at the root of the healthcare system.
1- A tax system that hides the true cost of employer provided coverage and significantly penalizes individuals.
2- Over regulation that limits innovation in health insurance and health care.
3- Large government programs (Medicare and Medicaid) that have fundamental inefficiencies and inequities in the way they pay for care.
All of these issues also directly impact pricing transparency in healthcare. Employer provided coverage has shielded individuals from the true cost of care and limited their need to understand healthcare pricing. Over regulation has limited competition and provided cover for insurers to hide provider pricing. Government programs underpay providers in many instances causing price shifting and distortion in the consumer market.
Dr. Flier doesn't offer a lot of hope for the current health reform initiatives suggesting that even after six decades, they haven't even fixed some obvious problems with tax deductibles for individuals.
It is hard to argue with the premise that you need know what the problem is before you try to fix it.
I would also suggest that pricing transparency is one of the core problems that needs to be understood and addressed.
He suggests three problems that are at the root of the healthcare system.
1- A tax system that hides the true cost of employer provided coverage and significantly penalizes individuals.
2- Over regulation that limits innovation in health insurance and health care.
3- Large government programs (Medicare and Medicaid) that have fundamental inefficiencies and inequities in the way they pay for care.
All of these issues also directly impact pricing transparency in healthcare. Employer provided coverage has shielded individuals from the true cost of care and limited their need to understand healthcare pricing. Over regulation has limited competition and provided cover for insurers to hide provider pricing. Government programs underpay providers in many instances causing price shifting and distortion in the consumer market.
Dr. Flier doesn't offer a lot of hope for the current health reform initiatives suggesting that even after six decades, they haven't even fixed some obvious problems with tax deductibles for individuals.
It is hard to argue with the premise that you need know what the problem is before you try to fix it.
I would also suggest that pricing transparency is one of the core problems that needs to be understood and addressed.
Wednesday, August 19, 2009
Americans can agree on many healthcare reforms
Recently John Mackey wrote a thought provoking editorial in the Wall Street Journal- The Whole Foods Alternative to ObamaCare
While some take issue with his suggestions for health reform, it is nice to hear an alternative to the assumption in Washington that the government can or should solve every problem by increasing the federal government’s involvement in personal and local issues.
Of course we need some health reforms, but the current proposal lacks many opportunities for improvement that the vast majority of the American people would support.
To name three easy ones addressed in Mackey’s article:
Pricing Transparency- What American would argue for a system that allows some patients to be charged 3, 5 or even 10 times more than the next patient for the same service at the same location? Who would support a system that allows hospitals to charge those without any insurance much more than those with insurance? The government doesn’t need to set prices; that would rightly offend many Americans as limiting the markets or freedoms. But there should be broad public support for pricing transparency so that patients will know how much healthcare services will cost and a simple rule that hospitals will charge all patients the same price.
Equal tax treatment for health insurance- What Americans would vote against allowing individuals to deduct their health insurance but allow companies to do so? The vast majority would support equalizing the tax laws so that employer-provided health insurance and individually owned health insurance have the same tax benefits.
Tort Reform- What American would vote against tort reform? The lawyers, sure. Anyone else? So let’s say 85% support for this one. Are the politicians listening to the people? No, they left this out too.
Since the politicians are leaving out the easy improvements that most voters would support, we have to ask ourselves who are the politicians listening to? If not the voters, then maybe the lobbyist? Big business?
With a 1000+ page bill, they ought to be able to find room for the simple things that most Americans would support.
Keep the dialogue going, maybe at some point the politicians will listen.
While some take issue with his suggestions for health reform, it is nice to hear an alternative to the assumption in Washington that the government can or should solve every problem by increasing the federal government’s involvement in personal and local issues.
Of course we need some health reforms, but the current proposal lacks many opportunities for improvement that the vast majority of the American people would support.
To name three easy ones addressed in Mackey’s article:
Pricing Transparency- What American would argue for a system that allows some patients to be charged 3, 5 or even 10 times more than the next patient for the same service at the same location? Who would support a system that allows hospitals to charge those without any insurance much more than those with insurance? The government doesn’t need to set prices; that would rightly offend many Americans as limiting the markets or freedoms. But there should be broad public support for pricing transparency so that patients will know how much healthcare services will cost and a simple rule that hospitals will charge all patients the same price.
Equal tax treatment for health insurance- What Americans would vote against allowing individuals to deduct their health insurance but allow companies to do so? The vast majority would support equalizing the tax laws so that employer-provided health insurance and individually owned health insurance have the same tax benefits.
Tort Reform- What American would vote against tort reform? The lawyers, sure. Anyone else? So let’s say 85% support for this one. Are the politicians listening to the people? No, they left this out too.
Since the politicians are leaving out the easy improvements that most voters would support, we have to ask ourselves who are the politicians listening to? If not the voters, then maybe the lobbyist? Big business?
With a 1000+ page bill, they ought to be able to find room for the simple things that most Americans would support.
Keep the dialogue going, maybe at some point the politicians will listen.
Friday, July 31, 2009
The Public Option
President Obama is championing a "Public Option" to offer insurance to Americans. The government's Public Option is proposed to give Americans more choices and pressure traditional insurance companies to do better. Obama has stated that the Public Option would compete fairly with the private insurers on a "level field".
We all need to evaluate this issue. If the Public Option is subsidized by the government, then it will offer 'cheaper' premiums - even if its costs are really higher. If people can buy a government subsidized Public Option that may cover more with lower premiums, then how will private insurers survive? They won't over time.
So will the Public Option use the government's power to compete on a "level field" with private insurance?
Let's make this simple. One proposal states that the Public Option would pay healthcare providers 105% of Medicare rates. However, a Federal Court in Florida recently ruled that a private insurer must pay 239% of Medicare rates to providers. The Federal Court found that 239% of Medicare rates was fair and a reasonable market rate to pay providers. See Weinberger, et al v. Aetna Health, Inc., No. 1:2006-cv-20249).
So let's stop there. The Public Option will pay less than 50% of a fair market rate.
Is there any way the Public Option can be championed as another market based insurance alternative competing on a level field?
What will happen to private insurance as an option?
Where is the mature, responsible and thoughtful health reform we need?
We all need to evaluate this issue. If the Public Option is subsidized by the government, then it will offer 'cheaper' premiums - even if its costs are really higher. If people can buy a government subsidized Public Option that may cover more with lower premiums, then how will private insurers survive? They won't over time.
So will the Public Option use the government's power to compete on a "level field" with private insurance?
Let's make this simple. One proposal states that the Public Option would pay healthcare providers 105% of Medicare rates. However, a Federal Court in Florida recently ruled that a private insurer must pay 239% of Medicare rates to providers. The Federal Court found that 239% of Medicare rates was fair and a reasonable market rate to pay providers. See Weinberger, et al v. Aetna Health, Inc., No. 1:2006-cv-20249).
So let's stop there. The Public Option will pay less than 50% of a fair market rate.
Is there any way the Public Option can be championed as another market based insurance alternative competing on a level field?
What will happen to private insurance as an option?
Where is the mature, responsible and thoughtful health reform we need?
Tuesday, June 23, 2009
Quality and Cost: Do you get what you pay for?
As we buy many products and services, we expect to get better quality if we are asked to pay a higher price. The new sports car is obviously more expensive and better quality than the used clunker. Of course we probably check consumer reports and other ratings before we buy just to be sure. We know high price doesn't guarantee that something is high quality. In other situations we may pay more just for the brand.
What about healthcare? Does paying more mean you are going to get higher quality?
Health Affairs published a nice study examining this issue. They looked at quality indicators and costs at specific hospitals. The bottom line: they found that many quality indicators did not improve with increasing costs and for others the quality went down at the more expensive hospitals. There were not any examples of higher quality resulting from higher costs. They also did analysis on the "Brand" issue in healthcare by looking specifically at academic medical centers. Increased costs at those centers did not add to quality either.
While the issues are complex and this study only examined a small set of clinical situations; consumers should realize that finding quality care requires careful research. And consumers should not assume that expensive providers or brand name providers have good quality. According to this study, and others, the opposite may be closer to the truth.
For useful links to quality ratings of providers, consumers can check out the Resources for Patients section at the Healthcare Blue Book.
The Health Affairs article at: Health Affairs 28, no. 4 (2009): w566–w572 (published online 21 May 2009)
What about healthcare? Does paying more mean you are going to get higher quality?
Health Affairs published a nice study examining this issue. They looked at quality indicators and costs at specific hospitals. The bottom line: they found that many quality indicators did not improve with increasing costs and for others the quality went down at the more expensive hospitals. There were not any examples of higher quality resulting from higher costs. They also did analysis on the "Brand" issue in healthcare by looking specifically at academic medical centers. Increased costs at those centers did not add to quality either.
While the issues are complex and this study only examined a small set of clinical situations; consumers should realize that finding quality care requires careful research. And consumers should not assume that expensive providers or brand name providers have good quality. According to this study, and others, the opposite may be closer to the truth.
For useful links to quality ratings of providers, consumers can check out the Resources for Patients section at the Healthcare Blue Book.
The Health Affairs article at: Health Affairs 28, no. 4 (2009): w566–w572 (published online 21 May 2009)
Wednesday, January 28, 2009
The Impact of Insurance on Healthcare Costs
It is well known consumers will demand more services if they don’t have to directly pay for them. It is also well known that there are large administrative costs and risk premiums included in insurance. That is why we don’t insure our cars for the periodic oil change or tire replacements. And yet, we routinely expect health insurance to cover the most trivial of services like check ups and routine care. But at what additional costs?
I would recommend reading Holman W. Jenkins, Jr. insightful argument published in the WSJ on January 21, 2009 “Can Obama Make Government Solvent”. In part he states:
The decisions our current government makes will have a large impact on the cost, quality and availability of healthcare in the future.
I would recommend reading Holman W. Jenkins, Jr. insightful argument published in the WSJ on January 21, 2009 “Can Obama Make Government Solvent”. In part he states:
“End the tax preference for employer-provided health care. Make it up to workers with an income or payroll tax cut. This one step would move the economy towards consuming health care efficiently and designing insurance policies that actually insure rather than channel the privileged class's health spending through a tax loophole.
The privileged class, exposed to meaningful price tags, would become a force for disciplining cost and quality rather than the opposite. Nothing else would so improve the country's long-term fiscal prospects or do more to lend practicality to Mr. Obama's goal of universal coverage.
Back in 1993, when minds were still fresh, economists left and right recognized that the enormous tax subsidy to third-party payership was the original sin of our health-care woes. The Senate Finance Committee devoted a full set of hearings to just this issue. But it was a fix that lacked the grandiosity of a flow chart showing how government would re-engineer health care from top to bottom. There's a lesson here: Real reform is often deceptively simple, leading naturally to changes in behavior that are more far-reaching than any detailed government prescription could hope to achieve.”
The decisions our current government makes will have a large impact on the cost, quality and availability of healthcare in the future.
Subscribe to:
Posts (Atom)
Posts
