Thursday, October 06, 2005

A New Transparency...

We’ve talked before about transparency in regard to health care costs. Recently, though, Aetna has really taken this concept to a new level. A new pilot program currently underway in the Cincinnati, OH market aims to make real numbers available to Aetna insureds who choose the Consumer Driven Health Care (CDHC) model, such as HSA or HRA.
We all know that carriers negotiate prices with providers, and we have some vague notion that these prices are significantly less than the “street rate” that doctors (and others) charge patients who either don’t have insurance, or aren’t in-network. Until now, though, we had no idea what those costs really are.
The primary idea behind CDHC is that insureds will make better health care choices if they have the tools to decide what is and what isn’t covered, and how much their out of pocket’s going to be for a given service or procedure. And that’s great on paper; the problem is that we consumers have never really had the one tool that would be most helpful: “how much does that cost?” If one knows ahead of time exactly how much a given service is going to cost, instead of guessing and then waiting for the EOB (Explanation of Benefits), then one can make more informed decisions about that service. Or one could even shop around for the best price (although I’m not personally all that enamored of “shopping around” for healthcare services, I recognize that a lot of folks have no problem with it). After all, even gas stations advertise their prices out front, so we can decide where to go to fill up. Why shouldn’t the same information be available when we’re shopping for an item even more expensive than gas?
According to the WSJ, the negotiated rates for some 600 common services are available, on-line, to Aetna CDHC’ers [ed: is that even a word?]: “For instance, an internist in the University of Cincinnati area charges Aetna or its members $161.32 for a visit from a new patient with moderate to severe problems, while another physician a few blocks away charges $132.23 for the same office visit. The first doctor also charges $41.89 for a chest X-ray taken from two angles, while the latter's price is $34.34.
Of course, there’s more to this than just raw numbers, and we’ll explore those other issues in Part 2. Stay tuned…
UPDATE: David Williams over at the Health Business Blog has an interesting post regarding a potential downside to consumers' health care decisions based on dollars alone.
UPDATE 2: An exclusive interview with Aetna's Medical Director sheds even more light on this exciting innovation.
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