Transparency. The basic requirements of consumer-directed health plans (CDHPs) are price transparency and outcomes data. The foundational concept underlying CDHPs is that consumers will ask how much services cost, and providers will be able to tell them.
Oh were it only possible. It looks like the six million folks who have bought CDHPs from an insurance industry eager to tout them as the second coming of (pick a deity) are having a tough time getting the pricing info they need to make informed decisions.
Aetna is ahead of the rest of the industryin providing information about phyeicians and pricing; they have been providing actual reimburement amounts for specific procedures in selected markets for some months. Humana is also doing this on a limited basis in at least one market (southern Wisconsin).
Here’s a quote from the Chicago Tribune article:
” But basic data about what services cost generally aren’t available. Medical providers and insurers consider this to be highly sensitive competitive information, and their contracts require that it remain secret.
That leaves consumers with more financial responsibility for their care but without the tools to manage these expenses.
“The market just isn’t ready yet to deliver on the promise of these new insurance products,” said Larry Boress, president of the Midwest Business Group on Health…”
While recent legislation will require hospitals and some other facilities to disclose their prices, the “prices” will be the list prices, and not the discounted rates. Thus this requirement may not be terribly helpful for consumers looking for useful information.
What does this mean for you?
Another (very large) hiccup on the way to consumer-driven nirvana.
Thanks to FierceHealthcare for the tipoff to the Trib’s article.
Aug
15
As with the controversy over the California Medical Society’s rankings of HMOs by MLR, I expect that payors’ efforts to publish price and quality data will receive some provider push back. It will be interesting to follow this issue. Thanks for posting!
I think a helpful starting point would be for CMS to post its reimbursement rates for all DRG codes by hospital and zip code on its website which consumers could use as a benchmark to assess the reasonableness of their own bills. It has already done this for 30 common procedures, but CMS needs to make it more user friendly and searchable by condition or surgical procedure as well as by DRG code. If these insurance contract terms are not revised to remove the pricing secrecy provision, it should be done legislatively if necessary. Insurers should be competing on deductibles, co-pays, out-of-pocket maximums, scope of coverage and customer service. Pricing transparency should be a given just like it is in every other industry in the private economy and even, at least to some extent, in the prescription drug sector of healthcare.
Though this will come off as a niche commercial so my apologies… what Robin asked for is the thrust of what we are developing – being able to see the WHOLE enchalada from billed to adjustments to insurance premium. Granted – we are just a small team trying to change a herculean industry, but after having to deal with the systematic confusion of healthcare costs and bills after both of my parents passed away, well, I got tired of waiting for others to develop something that not only help me sort out the mess but also let me compare my bills and statements with others. Our alpha version is far from perfect, but it is free for individuals (ad supported) though we are developing a $2 or $3 a month premium version that hides the ads). But we desperately need support, feedback, and testers. If anyone has been frustrated with the lack of Provider price visibility and insurer reimbursement… then at least consider using our FREE (albeit young and evolving) app and support our efforts via participation and provision of User feedback.
christopher
of course, it would be helpful to have the URL wouldn’t?
Sorry about that ;)
http://www.medbillmanager.com
again, thanks for your consideration
– christopher
I think two other changes to the current system that would facilitate pricing transparency are (1) insurers need to be much more forthright with providers as to just what their reimbursement rates are for a given service, test or procedure, and (2) we should remove the prohibition against price discrimination in provider billing. Then, Medicare could be billed at the Medicare rate, private insurers could be billed at their agreed upon rate, and self-payers could be billed at a REASONABLE list price subject to discounting (up to 100%) for those could can demonstrate financial hardship. Under the current system, providers have to bill everyone at the same rate which often, especially in the case of hospital charges, leads to artificially high, even absurd, list prices. With complete and clear transparency, the pricing gap between Medicare and list price for self-payers should shrink dramatically over time. It would probably never shrink to zero (absent a single payer system) because Medicare rates are basically dictated and not the result of a negotiation between parties with equal or even comparable economic power.
As I have all to well experienced, pricing transparency is difficult at best and misleading as well. It also assumes that one will research emergency care in the event that an accident occurs. It also assumes that under the pressure of any acute trauma, one will have the peace of mind to make sure they present themselves to the most cost effective facility. I do not see that happening.
Obviously, under emergency conditions, pricing transparency is not a viable concept. However, my understanding is that 80% of inpatient surgeries are scheduled in advance as are 100% of outpatient procedures. Under most circumstances, most of the time, pricing transparency (along with quality transparency) would be very useful information. Indeed, even under emergency conditions, transparency could be helpful in challenging bills as unreasonable if they turn out to be significantly higher than the cost of comparable treatment at a nearby facility.