Wednesday, May 03, 2006

Getting Transparent...

According to the Council for Affordable Health Insurance, “Americans are ready to become health care consumers, if given the tools to do so.
Well dunh, I could’ve told you that!
Actually, this has been brewing for a long, long time.
According to CAHI, more than 80% of those surveyed agreed that providers should publish the prices of their services. Of course, price isn’t (or at least it shouldn’t be) everything, but almost as many folks said that they’d “be likely to shop for the best price.
That’s troublesome.
There are probably very good reasons why Dr Smith’s charges are so much lower than Dr Jones. After all, what do you call the guy who graduates at the bottom of his med school class?
So it’s not necessarily heartening to see that folks are so price-sensitive, when there are other factors, as well. Of course, it’s not really surprising: I get a lot of folks looking for insurance “deals,” too; it’s my role to help folks see that there’s a difference between low price and value.
But there’s another side, as well.
I recently received a letter from the Chairman of the Board of one of my carriers (and no, I’m not special: it appears to be a form letter. Darn) whose company refuses to pay what they consider “outlandishly high prices” for services rendered. At claims time, if the carrier is convinced that the charges are out of line, they simply refuse to pay the billed rate, and offer to settle for a lower amount [NB: this carrier doesn’t use generally use networks, so there are no contractual issues].
So what happens if the provider says “no?”
They sue the insured for the balance.
Now, they are obviously within their rights to do so. After all, the patient/insured signed a consent form, agreeing to pay for services rendered. If their insurance company balks at the price, the patient/insured is left “holding the bag.” Now that’s a problem.
"If the hospital sues our customer, we provide defense with a lawyer chosen by the customer…Our customer will not be out of pocket one nickel."
Now that’s putting your money where your mouth is.
On the other hand, I’d be concerned about credit issues. While it’s all well and good that the insured doesn’t get stuck paying the higher price for services rendered, it may well be a black (or red?) mark on one’s credit rating. And since that measure is becoming more and more important (for loans, credit cards, even auto and home insurance rates), there’s a real danger that saving a few dollars on a procedure could result in a severely damaged credit rating. And then what?
When I walk into Wendy’s, I know how much that salad’s going to cost [ed: salad. Right]. But when I walk into Dr Smith’s office, I really don’t know how much that strep test is going to cost. And since each carrier has its own pricing, the model seems much more analogous to airline fares than restaurant fares.
Soon, the gummint will be sharing what Medicare pays for some common procedures. While that’s a step in the right direction, I’m not sure how useful that will be. Providers typically charge different amounts for Medicare patients than commercially insured ones, let alone those without coverage. At least for our seasoned citizens, more information may be close at hand.
And providers themselves are getting into the act; over at MedBill Advisors, host Chris Parks tells us about how HCA (Hospital Corporation of America) plans to inform its patients about their costs, in advance.
The bottom line is, transparency in pricing is an important, and potentially useful, tool. No one tool, however, is useful in all situations, and most jobs require several, as well as the skills to use them.
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