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

$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.

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.

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

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.

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.

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.