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.

Pricing Transparency In Minnesota

A new website promises to provide pricing transparency to Minnesota residents.

The site can be found at www.mnhealthscores.org and is offered by MN Community Measurement.

It primarily focuses on primary care services covering office visits, minor procedures and surgeries, labs, mental health and obstetrics. Just over 100 providers are listed in the new service.

The site is generally better and more informative that most state's pricing transparency efforts. The information includes specific provider pricing information such as the average price and the range of prices for each provider based upon what they typically charge insured patients.

For a list of other state specific sites see Healthcare Blue Book.

I can recommend that Minnesota consumers use this site, but they must remain aware that the prices provided are not a guarantee of the actual price patients will pay. Consumers must still make sure they request specific pricing prior to receiving services. Consumers can get free tips on how to discuss pricing with their doctors at Healthcare Blue Book.

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.