Re-thinking transparency

We first blogged on transparency in health care pricing and consumer-centric health care in 2005:

"One of these tools is the pilot transparency program."

So yes, we've long been advocates of what I called the McDonald's Model:

[click to pic to embiggen]

But FoIB Bob Graboyes of the Mercatus Institute offers a contrarian's take:

HEALTHCARE TRANSPARENCY MANDATES — FIRST, DO NO HARM: Op-ed on a point that Jessie McBirney and made in a recent @mercatus paper: why broad-brush healthcare price transparency mandates can paradoxically REDUCE competition and INCREASE prices. https://t.co/o2X1YoAYoQ

— Robert Graboyes (@Robert_Graboyes) August 31, 2020

Interesting.

Another great idea

This reminds me somewhat of the Sesamecare site which "takes the reduced-fee, cash only model and expands it to include primary care and dental visits, eye exams and MRIs, and other services." So there's precedence:

"I’m building a network of cash friendly medical providers in the DC Metro area."

This is from FoIB Sheron Sidbury, an agent in Virginia, who's expanding her menu of client services in a very meaningful way. She's taken a clue from our friends in the DPC and cash-provider worlds, and then gone a step further:

"[M]y goal is to help people in our local area find cash pay and other non-insurance methods to take care of their healthcare needs."

I love this.

Why?

Well, as we've noted ad nauseum, coverage ≠ care, and with today's emphasis on both higher deductibles and health care pricing transparency, this seems like a wonderful opportunity to help her clients. This effort is still in the embryonic stages, but I expect that it will grow quickly as more and more providers learn about it and hop aboard. Hopefully, this can continue to expand to other markets, as well.

So, fingers crossed hopefully.

The Latest Case for Health Care Transparency

Well, health care cost transparency, anyway.

We've long been advocates of this concept; all the way back in '05, we had an exclusive interview with one of its earliest architects:

"Recently, I had the opportunity to interview Dr Dexter Campinha-Bacote, Aetna Medical Director ... this is a great example of consumer driven health care (CDHC) ... These employers asked Aetna to develop tools that their employees could use to make “better informed decisions.” One of these tools is the pilot transparency program."

Over time, I became enamored of what I named "The McDonald's Model," which was eventually manifested most explicitly by a clinic in Southern California. Again, the emphasis was on providers giving consumers the price of their services up front, just as Ronald McDonald or Burger King tell us how much that burger and fries is going to cost.

Now, FoIB Steve Downey alerts us to the latest development:

"Trump White House wins court ruling upholding plan to require insurers and hospitals to disclose prices"

Well first, good on them - it's been a slog.

Second, it will ... interesting ... to see how (if?) this is actually implemented. As it is, the ruling seems to apply only to "the actual prices for common tests and procedures," the idea being that this will encourage competition and thus lower costs. Obviously, we're all for that latter, but I remain skeptical that this will actually be the end result.

For once, I hope to be proven wrong.

[Hat Tip: FoIB Shari G]

Speaking of #SurpriseBilling

Out-of-network balance billing has long been a bugaboo of ours; it's part of the whole "transparency in health care" issue we've long since supported. Here, for example:

"Briefly, the issue is that there is essentially a class of providers who, although they may ply their trade inside a network-approved facility, are nonetheless not contracted with a given (or any) network."

This has became a burgeoning problem, especially since so many ObamaPlans are now on an HMO chassis (that is, very skinny networks coupled with virtually no out-of-network coverage).

But there may be a light at the end of the tunnel. Our friend tsrblke has been pushing this for at least the past year, and graciously sent us this link: :

"MemorialCare instituted a policy for physicians’ groups that provide doctors to treat patients in its hospitals: make sure those doctors are in the same insurance networks as the hospitals."

#GreatStart

[Hat Tip: FoIB tsrblke]

Irresponsible Carrier Tricks (Or: You can't make a 2nd First Impression)

I recently had occasion to write my first ever Critical Illness plan. For a number of reasons, we chose Guaranteed Trust Life (GTL) as the carrier: they had a good plan, at decent rates, and their underwriting was a good fit for this particular client.

We eventually settled on a plan design and completed and submitted the application. The underwriting process was unremarkable (that's a good thing) and the policy was issued in a reasonable time frame.

Kinda.

At the time it was approved, they sent me an e-version of the policy (.pdf), which was nice, but we were also told that we'd shortly receive the printed version, as well. On October 3rd, we received this in email:

"Hello Henry,

We mailed the policy to the agent as indicated on the application."

When a week or so went by with no policy appearing, I followed up, and received this:

"The policy was mailed on 10/8/2019."

Hunh?

Okay, so I sent this to our GTL rep:

"According to this email, you first told me that you'd mailed the policy to me no later than October 3rd.

You subsequently told me that it had been mailed on the 8th.

It is now the 14th, and I still don't have it.

I am appalled at your company's lack of transparency and accountability.

One of my hats is insurance blogger. I will be writing a VERY negative post on this and will send you the link once it's live.

I often say that you only get one shot at a positive first impression, and GTL has failed this miserably.

I wish you well in your future endeavors, which will most assuredly not include me."

Pretty soon, I received an apology from the rep:

"Hello Henry,

I apologize for the inconvenience and the frustration. According to our systems, the policy was mailed on the 8th to the agent to the address we have on file for you. I have forwarded your email to our new business supervisor for handling. I am not sure why you have not received a copy of the policy yet but according to our notes, it was mailed on 10/8/2019."

Again, this fails to address why I was told that it had already been mailed a week or so before.

And then I received this from her supervisor:

"Good afternoon Henry,

I’m sorry to hear of the troubles we’ve had getting a policy delivered to you. 

I have ordered a new policy, which we will be mailing to you via UPS today.  The tracking number is:

Tracking Number:
[REDACTED]
Service: UPS Ground Service
Guaranteed By: End of Day Wednesday, Oct 16, 2019

I have also attached an electronic copy of the policy for you in the mean-time.

Please let me know if there is anything else I can assist with."

As I noted earlier, I'd long since received the e-version.

While I appreciate this last-ditch attempt to salvage some semblance of credibility, I see no indication that they've reviewed their processes to ensure that this doesn't happen in the future, nor that they intend to do so, nor that they even care if that happens. This tells me that this is not a carrier with which I should be doing business in the future: one needs to earn that second chance.

That Word Doesn’t Mean What You Think It Means

What do you think of when you hear the word emergency?

According to Webster’s Dictionary an Emergency is “an unforeseen combination of circumstances or the resulting state that calls for immediate action.”

However, insurers in Minnesota think it means something different.

“Minnesota lawmakers are seeking more transparency from air ambulance companies about the prices of their rides, according to the Post Bulletin.”

Why would lawmakers be interested in making these prices transparent, since the only time you would use an Air Ambulance is in an Emergency?

Because customers have received “surprise air ambulance bills …from insurers that have denied claims for emergency transport, saying the rides weren't preauthorized or weren't necessary.”

I have seen my share of unwarranted denials, but this takes the cake. In an emergency there is no time to get a Preauthorization. A Preauthorization is usually required for any type of surgery, lab, test, or medication that will require a significant reimbursement by an insurer. Preauthorization’s can take anywhere from 48 hours to weeks to obtain. Obviously if you are bleeding on the side of the road and will die without immediate medical coverage you cannot wait for a Preauthorization.

As to the necessity, once again, it is self-evident.

It is this idiocracy of thinking by insurance companies that hinder medical decision making. While this is an extreme of insurance meddling in medical decision making, this interference occurs hundreds of times a day in every medical facility across the nation.

Monday Transparency

Price transparency in health care has long been a recurring theme here at IB, going back to our earliest days:

"Recently, I had the opportunity to interview Dr Dexter Campinha-Bacote, Aetna Medical Director. He’s the “go to guy” for Aetna’s new transparency pilot program ... employers asked Aetna to develop tools that their employees could use to make “better informed decisions.” One of these tools is the pilot transparency program."

But we also know that for transparency to work, there has to be buy-in from health care providers, as well. And so:

"Makary is part of a movement of medical professionals who want healthcare to reflect the free market, with transparent pricing and clear information on quality, allowing patients to decide which entities succeed and fail, rather than the insurance companies"

The Free Market Medical Association (FMMA) now boasts over 20 chapters nationwide, and now offers "an online pricing tool where patients can find prices and quality information for cash pay physicians."

That last bit is important: I've never had a client ask about how to find the cheapest brain surgeon.

Pretty cool.

[Hat Tip: Brandon Dutcher]

Transparency is the Word

Gotta love this headline in today’s readings: Doctors: Don’t blame me for high healthcare costs.

“Lots of factors are at play when it comes to high healthcare costs. But doctors are sure of one thing: They aren’t to blame.

Physicians instead point to pharmaceutical and insurance companies as the source of high costs, according to a new survey from the University of Utah Health.”

This seems counter-intuitive: of course Doctor’s are to blame because that is who the patient pays for medical care. Yes you, the patient, pay the Doctor for your portion of the appointment, but the Insurance Company determines what is the patient’s portion.

There has been much discussion lately about making the cost of health care transparent. Most of that discussion revolves around the physician appointment and the physician charges but very little revolves around the part Insurance Companies play in determining the cost of healthcare.

To understand how vital a role Insurance Companies plays in healthcare costs, one must understand the relationship between the Provider and the Insurance Company. The Provider agrees to see all the patients in the Insurance Company’s Panel for a certain reimbursement for each Procedure Code that is billed. The Insurance Company agrees to list the Provider as an “in network” Provider and promote that Provider to their panel.

The Provider is given a list of select Codes and the reimbursement for each. Usually, the provider does not know what the reimbursement will be until the payment comes in. Since the provider does not know the exact amount he/she will be paid, charges are set high enough to ensure full payment from the various insurance companies with which the Provider is contracted. The standard charge is set at 150% or more of the Medicare Fee Schedule.

So, a Provider sets a charge high enough to get full payment and the Insurance Company pays the Provider, then why doesn’t the Provider know what the patient will pay. There are two factors:1) The reimbursement from the Insurance Company is always less than the charge (this is known as the write off) and 2) In the Insurance Contract between the Insurance Company and the Patient is defined Patient Responsibility of the cost. This includes a Deductible, Co Payment, Co-Insurance, Out of Pocket, Cost Share and a plethora of other terms to break up the Patient’s Responsibility. Based on all these breakouts, it is impossible for the doctor to know what the patient will end up paying.

Rx for Big Pharma?

One of the subtexts of the healthcare transparency movement is something called Pharmacy Benefit Managers (PBM's):

"PBM's are (allegedly) a cost-efficient way for carriers to offload the administrative functions of filling prescriptions ... The stated reason for this business model is that it helps carriers to rein in the cost of medications, which make up a disproportionate percentage of claims."

Of course, intentions ≠ results.

While the concept seems innocuous enough, it's apparently become a major source of tension in the health care community, and is frequently cited as a major driver of increasing health care costs.

So when I got this link from FoIB Holly R, I just had to pass it along:

Big Pharma Motto: A Healed Patient is a Lost Customer.

— 🖕🏻Aunt Crabby calls Bullshit 🖕🏻 (@DearAuntCrabby) April 9, 2019

Perhaps coincidentally, I also recently received an email from local insurer CareSource about their new efforts to bring about more transparency, and to rein in the power of PBM's:

"CareSource, a leading nonprofit multi-state health plan serving government sponsored programs, announced its intent to implement a new, integrated approach to administering pharmacy benefits and services."

The new push will focus on:

* Full price transparency validated by an independent third-party

* Custom pharmacy network to provide the same access members have today while protecting independent pharmacies

And several other worthy endeavors.

Although I'm generally skeptical about "feel good" insurance company campaigns, this one at least seems focused on something real, not just lofty.

#TimeWillTell.

Case in point: A client who takes synthroid recently refilled her 90 day scrip. Through her insurance (and thus, PBM), the cost would have been about $100. Uncharacteristically, GoodRx was almost $120. As usual, though, BlueSky clocked in at about $30. Heh.

End of Week Link-a-rama

■ Last week, I asked about the value of a proposed new Ohio law mandating that "[b]usiness owners with less than 100 workers would be allowed to see data on employees' health claims." I was wondering specifically why we even needed this, and what good it might be expected to do.

My co-blogger Patrick has provided me with a great answer, and I thought it'd be helpful to share it:

"This is only for 50+. Right now in the ESI market segment from 50-99 there is no data shared. This is a good step in the right direction for transparency but will also have to be accompanied by projected data if it’s going to be efficient."

Thank you, Patrick!

■ Our friend Holly R has tipped us to this item, which becomes even more relevant as we head into the Spring and Summer:

"To produce a malaria vaccine for mass deployment, biotech firm Sanaria has to decapitate and dissect out the salivary glands, which hold the malaria-causing parasite, for each individual mosquito—by hand. Enter the mosquito guillotine."

Cutting edge.

■ Finally, actuary and FoIB Greg Fann offers an inside look at the truth behind one of the most controversial aspects of health insurance:

https://t.co/GZvKBMdCDh

— Greg Fann (@greg_fann) March 29, 2019

Blue Cross: Word Salad edition

So this morning, FoIB Jeff M emailed this item about the planned merger of Blue Cross Blue Shield of North Carolina "with Portland, Ore.-based insurer Cambia Health Solutions. The two not-for-profit organizations with combined revenue of $16 billion and more than 6 million customers said the alliance will make health care "simpler, better and more affordable."

Wait a minute: what does "simpler, better" actually mean?

Well, it depends. According to the official email announcement:

It might mean "Each company retains its current assets, such as its reserves and capital, and there is no change to the underlying business in our states."

On the other hand, it could be that "The companies will share services, which will cause some resources to shift."

On the gripping hand, perhaps it notes that "Our long-term goal is to make health care more affordable for the individuals and families we serve ... Our expertise, common management and increased resources will allow us to better address rising costs in the health care system by reinvesting shared savings, enhancing price transparency tool."

Okay, but why does all of that remind me of this?

In the end, one suspects that it means "business as usual," only with a bigger footprint.

And as Jeff notes, a look at their website seems to indicate that "they still think healthcare and health insurance are the same."

Yay?

Transparency gone terribly wrong

We've been covering (and advocating for) transparency in health care pricing for a very long time:

"Gov. Rod R. Blagojevich today signed the Illinois Health Care Consumer’s Right-to-Know bill, which makes health care price and performance information for outpatient procedures available to all Illinois consumers."

That was over 13 years ago, and we can see how well that's worked out. Recently, co-blogger Bob V sent me a link to a story that not only indicates that we have a long way to go, but also implicitly explains why we likely will never really see true transparency:

"Her insurer’s price tool estimated less than $1,375 for a breast MRI. Then she got a bill for $3,200."

Ms Smith apparently did everything right: she researched MRI facilities and prices using UHC's online cost estimator [ed: and by the way, this is not an indictment of UHC in particular; I'm confident that that same would hold true with other carriers, as well], and still got socked with a larger-than-expected bill.

But why is that? Why is something so seemingly simple so difficult to obtain? After all, when I order a Big Mac and fries, I know exactly what I;'m going to shell out. Likewise a gallon of gas or an oil change. Why is medical care immune?

Well, there's the obvious challenge that the doc can't be sure that a particular surgery will go exactly as planned, and I get that. But simple things like non-emergency MRI's should be basic, off-the-shelf, easily priced items.

Or so one would think.

But here's the dirty little not-so-secret:

"Health-care costs are difficult to pin down because prices vary widely and are part of confidential agreements between insurers and providers." [emphasis added]

Now, I actually "get" that: UHC doesn't necessarily want Humana to know the specifics of its agreement with Dr Smith. And, of course, coverage will often change depending on one's plan's design. I just don't see how to square the circle.

On the other hand, we have newer models like Direct Primary Care and facilities like the Surgery Center of Oklahoma, which operate on a strictly cash basis, no insurance needed (or, in fact, accepted). So we know that cutting out the middleman (ie insurance and/or the heavy hand of government) is a way around the conundrum.But of course, both of these have their own problems and challenges, not the least of which is the ability of one to come up with the scratch to pay for it.

/sigh

Cost transparency: I'll drink to that!

Shot:

"Health care is a service like any other. We ought to expect price transparency for medical goods and services to make informed choices that maximize value."

I, too, have been chasing this wild goose for many, many years. And I still believe that it's a noble goal.

But as long as government and insurance - in other words, 3rd party payers - are in the mix, it's not a viable one.

Chaser:

Are you a Dr. who agrees with this article? Please help us show patients/media/govt that this article is true. Post your cash fees on https://t.co/KruMnPRA4H. Help be the proof-source that affordable medical care is abundant and not limited to a few DPCs and @SurgeryCenterOK

— Alisa LeSueur (@Alisa_LeSueur) November 12, 2018

And why would any physician agree to this? And perhaps more critically, how would they?

Which brings me back to my first point (above): so long as the government (through Medicare and Medicaid reimbursement levels) and insurance (trough multiple provider contracts) distort the price (that is, that which the consumer/patient/insured pays), then there's no practical way for this to occur.

Which of course brings to mind Direct Care (whether Primary or other): when one pays the piper oneself, then it's reasonable (and viable) to pre-determine the cost of various services beforehand [ed: up to a point - what if the knee surgery uncovers something more serious?]. Of course, there's still an affordability challenge (and, often, an accessibility one), which means we still have a long way go.

Which is still another reason I'd love to see true cat plans re-legalized.

CanuckCare© Gone Private

Regular readers know that Canada's "free" health care system has, well, issues. Some years ago, we noted:

"A group in British Columbia has offered medical waiting-list insurance to members whose government treatment is on hold."

And, of course, it's well-documented that this is a problem for a lot of our Neighbors to the North:

"My father’s first oncologist appointment was scheduled for after he died."

Well, better late than ... Oh.

A half dozen years ago, Bob posted on the Surgery Center of Oklahoma, which "operates on a cash only basis. They do not accept health insurance, Medicare or Medicaid funds."

Turns out, our Neighbors to the North also have their own version:

"Check out Timely Medical Alternatives in Canada, which specializes in helping Canadians find affordable care (for cash payment) instead of waiting in the queue."

And indeed, when one visits the (aptly named) "Timely Medical Alternatives" site, one is greeted with an informative banner that touts their 14 years of experience, 20 facilities in Canada and the US, and (like their Sooner State colleagues) significant discounts. Best of all, they touch on two IB "hot buttons:" speed and transparency.

Speed:

"Recent evidence suggests that Canadians who require surgeries wait on average for approximately 20 weeks to receive the treatment they deserve, more than twice as long as national averages from when data first was collected a little more than 20 years ago"

But hey, free, right?

And transparency: one has only to select from the menu of services provided, and with a click of the mouse receive a free, no obligation quote.

Nice.

[Hat Tip: Twila  Brase]

MyChoice: Part 2

Last Friday, we posted on a new product being rolled out by Blue Cross/Blue Shield of North Carolina (BX):

"MyChoice is a less expensive option for families and small businesses who may not be able to afford other, higher-priced ACA plans"

The product's "hook" is that, instead of paying negotiated rates (as in PPO and HMO models), the plan reimburses "up to" 140% of what Medicare would pay. So, for example, if the doctor charges $100, and Medicare would have paid $60, MyChoice would reimburse $84 (leaving $16 as a potential balance to be billed). Now it's possible, given the "up to" wording, that the carrier may, in fact, send a check for (substantially?) less than this.

But it gets even more interesting: I had at first taken this to be a plan for small employers, but BX is also offering it on the individual market for 2019. Note, though, that even though it's ACA-compliant, it's not going to be offered on the Exchange, and therefore it's not subsidy-eligible (which makes sense, given it's already bare-bones pricing). On the other hand, it does include ACA-required EHB's and no exclusions for pre-existing conditions. And, of course, no extra charge for folks with those conditions.

So Henry, you may ask, how can they offer ObamaPlans with premiums discounted by up to 30%?

Well therein lies a rather interesting tale: while pretty much all carriers are now moving to narrower networks and abandoning PPO-style plans, MyChoice eschews the network model altogether, and, in fact tosses out UCR (usual, customary and reasonable), as well. Instead, you go to any doc you choose, and the plan will pay up to that pre-arranged number. And this is the case with both the individual and group models.

Patrick and I have some questions about this, and have reached out to the carrier for clarification (which we'll share in a future post providing they reply). But in the meantime here's my takeaway:

On those individual plans, the anti-choicers went ballistic over the new, expended Short Term Medical plan rules; one can only imagine the paroxysms they'll have on these.

And what about employers: will they be able to explain the potential balance billing nightmares to their employees? The carrier provides at least a partial answer:

"Blue Cross NC encourages myChoice customers to talk with their provider before any appointment or procedure to make sure they will accept the benefit payments that are provided, or find providers who will."

Now again, this touches on the Holy Grail of transparency, but as I alluded to in the previous post, who shops for the cheapest brain surgeon?

Patrick was concerned about how prescriptions would be handled in these plans, and now we know:

"The plan has a contracted network of pharmacies with agreed-to prices. There is no balance billing if a member goes to an in-network pharmacy."

And they're also HSA-compliant, which may help mitigate some of the balance billing concerns (or no).

Patrick also noted that these plans aren't available state-wide:

"BCBSNC is only offering the product in counties where they couldn't leverage providers."

Which makes sense, in a macabre way. Again, this is ripe for balance billing.

Will be interesting to see how this fares.

Looking forward to reporting on BX's answers.

Something old, something new [UPDATED]

[Scroll down for Update]

So back in April, we blogged on a medical insurance reimbursement model called reference-based pricing:

"Briefly, this is where an employer enters directly into a contract with a hospital (or other health care provider, one supposes, including DPC) ... but can carry additional risks, as well, namely balance billing"

In that post, I really defined the concept way too narrowly, because it doesn't have to be contractual with the provider. Indeed, as FoB Jeff M alerts us, it can be in relationship with one's insurance company:

"MyChoice is a less expensive option for families and small businesses who may not be able to afford other, higher-priced ACA plans ... This isn't a reduced-coverage plan, however. The cost savings are achieved through reference-based pricing. The plan reimburses customers directly for medical procedures at rates that are up to 40 percent higher than what the doctor or hospital would receive for providing the exact same services to a patient on Medicare."

Which seems fair, and also touches the sacred Price Transparency button. The challenge, of course, is two-fold (at least):

As noted in our April post, this opens up the very real possibility of balance-billing; that is, it's not a network issue, so the provider is free to charge more than the reimbursement value. Which leads to the second, related issue: sure, this may be great for non-emergency services, but who's shopping for the cheapest ER when having chest pains?

And the balance billing issue on this could be huge. remember last month's post on the $100,000 heart attack? A key passage notes:

"His insurance did what it was supposed to do, it made a fair and reasonable offer for the care received."

Kinda like 140% of Medicare pricing?

And how did that work out?

"St. David's stuck to their guns and refused to budge."

So, is this the future?

UPDATE: Co-blogger Patrick explains how this will work in practice:

"Essentially the member gets reimbursed for the cost of the service at 140% of the Medicare rate, so if a doctor charges $100 the member pays $100. If Medicare contract says the provider gets $40 then BCBSNC will reimburse the member at $56 (140% of $40).

If that isn't enough reimbursement for the doctor then they can balance bill the difference [ed: as noted]. Think about how much of a nightmare this will be for members: Every code has a different charge and reimbursement. If you have ten codes from your ER visit then you could be balance billed for each line item. Aspirin at $8 Medicare pays $0.20. 140% of $0.20 is $0.28. Does the hospital balance bill the difference of $7.72 or do they eat it? How ticked is the member if they have to pay $7.72 for an aspirin?"

Indeed. Thanks, Patrick!

Tales from the (Health Care) Front

■ First up, the joys of Government-run health "care," wherein the VA continues its #Winning ways:

"Secret data: Most VA nursing homes have more residents with bed sores, pain, than private facilities"

Sad and frustrating:

"More than 100 VA nursing homes scored worse than private nursing homes on a majority of key quality indicators."

Shanda.

[Hat Tip: ginny j]

■ Second, a report on one of the 58-state laboratory models (the concept of which I'm a big fan):

"Instead of starting with the hospital’s list price and negotiating down for discounts, [Montana] began telling these facilities how much it was willing to pay — a “reference price” — for each type of hospitalization."

In a kind of "reverse transparency," the state is using Medicare pricing as its benchmark, and so far it seems to be working:

"Two years in, the state calls the effort a success, saving $15.6 million this year over the estimate of what it would have paid without the change."

Will other states follow? That remains to be seen, but one wonders if the demographics here (Montana ranks in the bottom 15% in population) play a big part.

[Hat Tip: Elisabeth Rosenthal]

■ And finally, "Is The Cash Price The Best Price?" Well, that certainly seems to be the argument put forth by DPC proponents (and others, of course). The idea is that paying cash for medical services actually results in lower out of pocket costs (although for those with insurance, there's additional paperwork to get those payments to count towards one's out-of-pocket).

The folks at Green Imaging think this is the way to go, though:

"[W]hile the idea of big health insurance companies negotiating lower prices with the hospitals sounds excellent on paper, the reality is that negotiated prices may be more expensive, sometimes much more expensive, than if patients simply had no insurance to begin with."

Or choose to skip using it.

There are, of course, downsides, including doing that negotiating oneself (which many folks are loathe to do).

Unfortunately, Dr Dickerson has missed one excellent reason to go this route: "paying cash" can also mean using one's HSA (or HRA/FSA) funds for an additional economic boost.

Too bad, really.

Ca$h is King

So, last month we noted that New Hampshire was experimenting with a novel approach towards incentivizing price transparency. One of the challenges is that, absent skin in the game, a lot of folks just don't see the value, (or want to put in the effort). But Granite State employees now do have a reason to shop around:

"[A] school nurse who is covered through New Hampshire's state employee health plan, found that choosing a certain facility scored her a $50 check in the mail."

And the idea seems to be catching on:

"The Maine Right to Shop law begins by giving patients direct access to price information, enabling them to make informed decisions about costs of their care."

Actually, that's not true: it "requires health insurance companies offer plans that allow patients to shop for comparable services and provides incentive for them to peruse the healthcare market for treatment that best fits their budget." Plus, whatever savings are realized are split between the carrier and the insured.

This also has potential:

"[A] third key feature of the Maine law allows out-of-network providers to compete for patients on a level playing field ... you can see any provider you want out of network, as long as they are lower-cost."

I like the concept of this approach, but I wonder how carriers will be able to process these kinds of claims. That is, whatever is saved on care may be eaten up by admin costs (and thus) higher premiums. And I'm not the only skeptic:

"Until providers are incentivized to compete for patients based on both the cost and quality of care, the massive waste of resources produced by this predictable market failure is unlikely to be remediated."

Long time readers will recall that I've always been a fan of the 58-state laboratory model, so I'm very interested in seeing how this works out.

[Hat Tip: David Whelan]

Stupid DPC Tricks

I'm beginning to see why Direct Primary Care continues to remain a blip on the health care radar (comprising 3% of practices, it's basically a rounding error):

And when they realize that they could have gotten that MRI for $300 instead of $2500, along with their $7500 deductible (which they have never met because we encourage people to stay healthy) then you begin to see why price transparency is important and why insurance fights it. https://t.co/4GPXVsmBca

— John Chamberlain (@misterchambo) April 25, 2018

This is just silly: why would an insurer care how much that hypothetical MRI cost in this example? It's not like they're the ones paying for it. And if the insured has already met their deductible, the carrier has a vested interest in encouraging its insureds to find the lowest price.

I'm becoming less and less enamored of this health care delivery model every day.

The check is in the mail (Seriously)

We've talked about transparency, Direct Primary Care, and other strategies to try to rein in health care costs. But this item, tipped to us by FoIB Holly R, may just be the most effective method yet:

"Need a medical procedure? Pick the right provider and get cash back"

Most of us are likely familiar with the "Find a Provider" button on our carrier's website, or a referral from one's Primary Care doc, and these can indeed be money savers. But until now, I'd never heard of a plan that actually pays you cash on the barrel-head to choose a specific facility.

Now, there's always the question of quality vs cost, and that's a valid concern. But one would think that negative feedback about any given provider would be taken into consideration buy the insurer (or not).

Nice to see more outside-the-bun thinking.