See this AP article by Patrick Howe in the Washington Post: “Unknown Prices Hamper Health Care.”
Almost nobody, from the doctor to the patient, knows what a given procedure really costs.
And that’s a real problem for would-be reformers who favor a system that counts on consumers to hold down health care costs, by putting them in charge of their own spending. . . .
All hospitals have official price lists for procedures but most are reluctant to give them out for fear of damaging their negotiating power with health insurers. Even if they did, they would be of little use to consumers because the system is built on discounts to HMOs and government programs that buy in bulk.
Several Minnesota companies are leading a movement toward so-called consumer-directed health plans. The plans are premised on people getting a certain amount of money from their employers, say $1,000, to spend how they please on health care in a given year. Money they don’t spend can stay in their account for the next year. If the money is exhausted, the person has to meet a fairly high deductible before insurance kicks in.
Some tout those plans as a solution to many of the health care system’s woes. The theory is if people are more in control of their health care spending, they’ll make rational decisions about which doctors to see and which tests to have, and as a result will save the system money overall.
The new Medicare law gives the idea a boost by creating health savings accounts, tax-free accounts similar to IRAs that individuals can use to pay medical expenses. But the system crumbles if people can’t actually get information about what things cost.
(See my post immediately below regarding health savings accounts)
“We need information and it simply doesn’t exist,” said Carolyn Pare, CEO of the Buyer’s Health Care Action Group, a coalition of large employers dedicated to changing the health care system. . . .
Executives with several of the companies that offer the health plans said the “value” question is key. They say, for example, if you try to price medical services only by procedure - an X-ray, say - some of the best hospitals look expensive. But if they’re priced instead by the overall cost of treating a given illness, hospital systems such as Rochester’s Mayo Clinic come out as the best deals.
Bruce Reuben, president of the Minnesota Hospitals Association, agrees that consumer-friendly information isn’t available. But he said that hospitals and clinics recognize the need and are already working to provide it.
He said, however, that they’re determined not to have the information be simply about costs.
“That’s not enough,” he said. “You have to look at a combination of cost and outcomes and, some would argue, patient satisfaction.”
An industry representative says the cost-information problem will solve itself. “Once you have the means to do something about it, markets will provide the information,” said Greg Scandlen, director of the Center for Consumer-Driven Health Care. “But it won’t be overcome until the consumer has the money in hand.” . . .
While it’s attracting growing interest from employers and policy makers, the consumer-driven model is opposed by many, particularly those who see a Canadian-style system as the best answer to the system’s woes.
Putting too much decision-making responsibility on the backs of consumers could be outright dangerous, said Elaine Cunningham of Children’s Defense Fund of Minnesota. A person with a broken leg, she says, may not be in a good position to know if they need a costly MRI or not.
“It’s not even a good goal because we don’t know what we are buying and I don’t know how we’re supposed to know,” she said.
Critics also say the policies, with their high deductibles, could actually drive up costs if people decline to spend money to go to the doctor for procedures that could keep a medical problem from getting much worse.
“Underuse is as widespread a problem or more so than overuse,” said Kip Sullivan, a health system analyst who supports adoption of a universal health care system.
The provision of information for consumer-driven health care therefore needs to involve three types of information: cost, quality, and how to determine when paying for services now will prevent having to pay much more later (and, in contrast, when it’s OK to skip the trip to the doctor and the antibiotics, etc.).
On a personal note, the last few days I’ve been having some upper respiratory symptoms and fearing it was the dreaded flu. None of my family got flu shots — not to save money but due to neglect.
This morning, my 10 year old woke up with classic flu symptoms. Having heard about the antiviral treatments available, we made a quick run to the pediatrician, who made the diagnosis and wrote the scrip. It cost $50 for the med plus $25 office visit copay, a good deal more than a flu shot, I believe.
On the other hand, I took the opportunity to get a free consult with the doctor, asking her some questions about my symptoms (she agreed–not flu, at least not yet) and about over-the counter and home remedy treatments. $25 saved there. I’d have otherwise been inclined to tough it out, but I wonder how many people with my symptoms (I could barely talk yesterday) would have gone to a doctor, and not thought to take advantage of a captive young doctor in the exam room to pump for free advice.
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