Steven Weissman publishes an article on health care pricing in a blog on Center for Health Journalism:
I am going public to reveal the astonishing truth. There is a simple way to instantly, with ease, end our nation’s health cost misery!
When the founder of a Miami area hospital, who was a longtime friend and client died, I became interim president. The insider’s view of the healthcare system is enough to make anyone sick. …
Laws requiring health providers to publish price ranges or average prices are growing in popularity. Such so called “price transparency” serves as a public relations gimmick to relieve ever mounting public pressure on elected representatives. Simply put, each of us is entitled to know the actual price we will be charged for our healthcare. Limiting disclosure to price ranges or averages, while permitting providers to predatorily bill each person a different amount, unfairly benefits providers at the expense of all patients.
While it sounds nice, it remains a truism that a person in an ambulance doesn’t have time for price shopping. Now this may be ameliorated by the very act of publishing a price list, as then consumer groups can compare and publish conclusions to the general public, and hospitals and other providers who are out of line on price may then revise their prices downward – or possibly upward.
On the other hand, the sheer volume of procedures and prices may be such that ‘price transparency’ becomes a meaningless concept, even for consumer groups. On this I’m uncertain, but Steven’s conclusion rings some warning bells for me:
When rates are set, patients will be able to shop for good healthcare value. Providers will be forced to compete based on price, quality and service. Healthcare costs will plummet. The cost of health insurance, which is simply a direct function of underlying medical costs, will plummet as well.
Perhaps it’s just the cynic in me, but I think that last sentence is naive. Health insurance must include a profit margin, based on health actuarial calculations. Nor do I really see anything here about wellness pricing, which I recall Mayo Clinic had advocated a very long time ago – possibly before the Web was invented. It never seemed to go anywhere, but as I recall the concept was to pay the provider based on the health outcome of the patient. By removing the ‘price by procedure’ practice, duplicate tests become a negative, and the provider (especially the commercial side of the operation) is focused on outcome, rather than piecework. Sounds great in abbreviated theory, but how do you compensate, say, oncologists who work on what is currently terminal cancer? Or hospice centers? I suppose outcome expectations have to be detailed, but that becomes a moving target. Perhaps that’s why this concept didn’t make it.
Down in the comments section is a suggestion of something of which I’ve had a suspicion, but not the time to investigate.
Free market competion in healthcare.
Posted by Thomas Johnson (not verified) | Wed, 2016-06-22
Someday I must find time to read Mr. Smith. I don’t revere the founders of systems of thought, but sometimes they provide wonderful ammunition against their blinder followers.