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
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.
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