Should all health care providers and hospitals be required to post their prices?

Should all health care providers and hospitals be required to post their prices?

Since last weeks Time Magazine article by Stephen Brill came out, the media has been buzzing with idea of price and cost transparency. As the Huffington Post stated today in their article “Why Published Prices Could Improve U.S. Health Care Costs“, trying to lower the cost of care while the margin of profit on most services and durable medical equipment is much higher than anywhere in the world is lunacy.

In our office, our prices are posted on the fee sheets patients sign in with. These are our regular prices, which may vary when an insurance policy we are in network with take their discount. Why is it that few providers in health care are willing to do the same. Many walk in medical clinics will tell you what the office visit is, why won’t that surgeon tell you? Why, as many cash patients have found out can’t you ask the health care providers staff what something costs and get a straight answer?

Recently, we had to shop around for the cost of having a nose job done. While the price is outrageous (we will be discussing this with their staff before we book), they will tell you what they charge (or wish to receive). Unfortunately, prices for healthcare services are often unhinged from the reality of this being an hour or less procedure, and it is likely the doctor does two or three or more of these per day. How much is his time worth? If we let the cat out of the bag and allowed them to advertize their prices, would the price drop markedly (probably)? We saw a drop in prices when lasix became a more advertized commodity. The prices went from $4000 to about $400 per eye.

Of course, we are talking about an elective procedure that is not paid for by insurance. Traditional insurance is believed by many economists to have raised the cost of care because the consumer no longer pays the bill and someone has negotiated the rate. Insurance companies have added to the costs tremendously by telling doctors what to do, how to diagnose, what is needed and in the case of most doctors, has strangled them financially, while enriching hospitals, institutions and suppliers. Stephen Brill’s article has details on this but now, many doctors are selling their practices to hospital systems who bill more and give up trying to run their busy practices that have declining revenues while the workload becomes unmanageable. The hospital buying their practice becomes a better deal for them and since they have better negotiating clout, they can demand more for lower cost services. On the other hand, Medicare has a much better negotiating position and pays less for hospital stays than your insurance carrier because every hospital wants in with Medicare. As Mr. Brill states, the hospitals which are new and shiny all advertize in Florida, they all complain about the Medicare rates and they all want in.

The part that may also help is when a medical emergency occurs, most of us are scared and even our doctors want us visiting the local ER because it would disrupt their practice and they are not set up for those kind of emergencies. In the United States, we have this wierd culture of going to the ER, presenting our insurance card, spending a few hours and then receiving a bill that has fees of $4000 or more which make little sense except if you are insured, because the insurance carrier cuts the bill and you would likely pay a small co payment. Since you did not feel the bill, you are out your co-payment. What if that went against a $3000 yearly deductible which is slowly becoming the norm, then it is your money and you are likely to scrutinize the bill more. The problem is, you are still at a disadvantage because the hospitals chart master as discussed in Brill’s article has a list of fees that are rediculous and are so unhinged from reality that how would you know how to deal with this. In the hospitals mind, this is where negotiations begin (unless your insurance already discounted the bill). If you were uninsured, this bill is yours and those who have no idea that after the illness, you get ill by trying to decipher a ridiculous bill and not realize you need to negotiate this down will be financially hammered, while those who are insured pay a lower amount based on a contracted rate. When you have medicare, the contracted rate is much less due to RBRVS or the Medicare relative value scale. What is that care worth and what does it really cost to run all this medical stuff.

While looking at this, one must ask if Medicare for all is a much better idea (it is) because everyone wants in, they have pricing power and it would lower the overall cost significantly. Medicare does not do as good a job with suppliers of medical equipment but that can be fixed and Medicare must be allowed to negotiate drug prices unlike the situation that exists today. We are likely to go single payer soon anyway, and it looks like some policy makers are considering allowing people to join into Medicare at a younger age. Some would argue that this will make costs rise but they are likely to drop because of Medicare’s clout in the industry. Once this is done, it is not a huge stretch toward a national health care program once we find out having more Medicaid simply adds costs to the private insurers (it pays too little, and they find the balance on the private pay market).

Getting back to the original premise, if everyone had to post their prices, it would indeed lower the cost of care, which is just a start because so many procedures and tests are merely fear mongering as speciality groups come forward and tell us which ones are overdone and unnecessary. Once we figure out which health care providers are needed, and which ones are best serving primary care, primary care needs to be paid better, which will limit many specialty visits in a good way. This will force many specialists to go where the money is which is which would be primary care. This will help solve the physician shortage as well as changing our attitudes toward doctor dependency, a huge problem in this country. As people need to visit the doctor less, doctors will have more time for those who truly need help. Also, with Medicare setting prices, hospitals and the monopolies they are building will have less clout as more doctors choose to remain in private practice.

Posting prices while a good idea will not solve all the cost ills in healthcare in the U.S. It is a start as they come clean. By allowing the public to understand their health and what health care can and cannot do, a knowledgeable public will make wiser decisions and will spend less on health care. As long as the public does not understand which choices to make and makes them from fear mongering, even posting prices will not stop a fearful patient from demanding things from the healthcare system that are not helpful such as unnecessary tests including MRI’s.

What do you think? As always, I value your opinion.