Wednesday, August 9, 2017

Healthcare -- Just Tell Us What It Costs

The Idiosyncratist has no particular opinion about either political party's healthcare policies; my only observation is that people seem to hate all of them.  

But certain ideas do make intuitive sense.

One of these is transparency -- requiring every doctor, clinic and hospital to post a price list.  This works for dentists and eye doctors and veterinarians. It's time to apply it more broadly.  

Here's a fun video that explains some of the needless complexity that has resulted from not requiring price lists.

One Situation

Last month I got a simple, single-assay blood test for a minor hereditary condition that is well managed with generic medication.  I provided the lab with my new insurance card, and the lab's crack administrative team went ahead and billed my former insurance company, which of course denied the charge.  

I was billed almost $160 for a test that should have cost $20.

After several hours on the phone and on hold, I got the matter worked out. I learned the price only after I had had the blood test and after two insurance companies had run the bill through their elaborate bureaucracies.  It was $27.

Leave aside that it's hard to trust test results generated by a medical laboratory that cannot send a bill to the right insurance company.  Let's talk about the cost implications

High-Deductible Policies

Like many people now, I have a high-deductible health insurance policy.  This does not bother me.  I'm happy to trade $10 copays for full coverage if I get a cancer diagnosis. 

My deductible is $3,000.  Like most healthy people, I don't have that much in the way of medical expenses every year, and so all my medical costs are on me. 

On at least two occasions, I have been able to save money by checking prices.

In one case, I was bit by a dog. (My fault; we were playing fetch, and I mishandled the stick.) In an excess of caution, I decided to get an overdue tetanus booster:  
      My options were these: 1) See a doctor at an urgent-care center for $280, 2) See a nurse at a pharmacy clinic for a little over $100, or 3) Get a tetanus shot from the pharmacist at Costco for $15.
      Since I'm not stupid, I chose the third option.  

In the other, I made use of pharmacies' online price lists.  I found that the 90-day price for my generic drug varied from $20 to $90.  On an annual basis, choosing the right drugstore saves me $280.  I appreciate that.

I'd be happy to do the same with other medical expenses, and I believe other people would too.  

In fact, those new high deductibles could drive down medical costs by motivating people to seek lower-priced alternatives and, indirectly, by motivating medical care providers to set competitive rates.

The only reason this not happening is that medical charges are closely held secrets.  

How It Would Work

If I make a doctor's appointment today, the receptionist will tell me, "We don't know how much the consultation will cost."
       Maybe, with transparent pricing, the receptionist could say, "The doctor bills $100 for every 10 minutes of his/her time; if medical tests are ordered, we will tell you the cost before the tests are done."

If my doctor ordered me to get an MRI at an institution s/he owned, I could consult an online service that compared prices for the same procedure.  An outfit called already does this in some places. 
       Or, even better, I could call my insurance company and ask the price BEFORE I ran up the charge.  Shouldn't health insurers take an interest in cost management, or at least help patients who want to minimize their expenses?

If my kid fell and injured his arm, I could check prices for x-rays and stitches at the several hospitals' emergency rooms in my area and choose one.  Or, more likely, while in the emergency room, I could do the research on my cellphone and argue later if I thought the price of treatment was out of line.  
        (Goodness knows there would be plenty of time.  On my only visit to the emergency room, several years ago, it took the doctor EIGHT HOURS to diagnose appendicitis.)

How to Make It Happen

Some years back, one political party passed a bill called the Affordable Care Act.  The other party has been fighting to repeal that bill or pass its own ever since.  

Unfortunately, neither party has paid much mind to the elephant in the room:  affordability.

Why not a bipartisan bill, two pages long, requiring every healthcare institution and practitioner to post a price list for every service it/he/she provides?  

Yes, the AMA would squeal.  So would all the other participants in the industry that soaks up 18 percent of national expenditure.

My answer to the complaints would be this:  Tough.  People have a right to know the cost of something before they are asked to pay for it.

Note:  Here is yet another article explaining that that we spend too much on healthcare.  From the article:

"According to experts, there are two underlying reasons why the United States spends so much on healthcare:  It uses expensive medical technology, and prices for healthcare services and goods are higher than in other countries."

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