The old aphorism is true, leopards don’t change their spots!
For these three entities that oppose the new HHS price transparency rules, and for many others to be sure, there is no incentive to hold down healthcare care costs. In fact, the incentives of the current system of healthcare financing are such that it’s in their favor for prices to always go up.
In all cases, whether it be a percentage of claim cost, percentage of premium or percent of discount margin, these same price-hiding crony pals continue to benefit financially when the price of medical care rises.
This whole issue of “surprise bills” is a symptom of a more pernicious economic disease which has been driving prices in healthcare for decades; that being, a lack on discoverable, actionable meaningful prices for bundled medical services.
Moreover, the lack of transparent/actionable pricing in healthcare is a derivative of the manner in which we have chosen to code, bill and get paid for medical services.
And most of the legislative and regulatory fixes proposed do NOT correct the core problem.
The corollary being, there are no surprise bills when we use real honest pricing strategies!
Case in point…you will never have a surprise bill from Surgery Center Of Oklahoma. They publish easily discoverable all-inclusive prices for their surgical procedures. And, they offer same price to any willing buyer, because they aren’t controlled by network contracts.
Price setting or caps is not the correct response to the problem of this form of price gouging. This knee jerk visceral reaction is shortsighted. Price setting ALWAYS distorts markets in negative ways which are not always apparent; shortages or supply chain inefficiencies/interruptions/gaps are inevitable.
It is NOT the cost of medical care & and pharma that is the problem…It is the simultaneous lack of both transparent & actionable prices, combined with using proprietary contractual formulary agreements as a substitute for honest pricing, which has brought us to this dangerous fiscal precipice. Hiding costs by shifting them or redistributing them is same economically illiterate strategy which brought us Obamacare.
“I am often asked if the free market can work in health care. My quick reply is: That is the only thing that works. At least, it is the only thing that works well.
Show me a health care market where there is no Blue Cross, no Medicare and no employer. I’ll bet it’s a market that works a lot like the markets for other goods and services.
In Overcharged: Why Americans Pay Too Much for Health Care (Cato: 2018), law professors Charles Silver and David Hyman make this same point in spades.
After several decades of trying everything from managed care to value-based purchasing, employers need to sit up and take note. The authors say the only thing that really holds down costs is giving money to the employees and letting them buy their own health care. “There is no health care cost crisis in the retail sector,” they write, and there “never has been.”
Atlas MD in Wichita, Kansas, for example, provides just about every service you can get at a primary care doctor’s office for $50 to $75 a month for adults (depending on age) and $10 for a child. Doctors are available by phone or email 24/7. Drugs cost less than what Medicaid pays. Medical tests are cheap. A cholesterol test is $3, a tiny fraction of the charge that the lab they deal with bills to insurers. An MRI scan costs $400 instead of the typical third party charge of $2,000.
What about expensive hospital care? That too can look like retail medicine if you know where to look. The Surgery Center of Oklahoma (SOC), founded by Drs. Keith Smith and Steve Lantier, posts prices for 112 common surgical procedures. They deal mostly in cash and they don’t take Medicare or Medicaid or negotiate prices with insurance companies. One of SOC’s competitors is Integris Baptist Medical Center in Oklahoma City. The contrast couldn’t be starker, as the authors note:
Integris charged $33,505 for a complex bilateral sinus procedure, which helps patients with chronic nasal infections. This bill covered only hospitalization; the fees for the surgeon and the anesthesiologist were extra. At SOC, the all-inclusive price for the same operation is $5,885. Not surprisingly, Integris’s bill was loaded with overcharges, including $360 for a steroid available at wholesale for just 75 cents, and $630 for three doses of a pain killer called fentanyl citrate, which altogether cost the hospital about $1.50.”
New developments in retail medicine are almost always the product of entrepreneurial thinking. Sometimes the entrepreneurs are medical doctors. Sometimes they are business types with a strong interest in eliminating the many inefficiencies in traditional health care.”
We found that the assets, investments, and bank accounts at these charitable hospitals increased by $38.9 billion last year – from $164.1 billion to $203.2 billion. That’s 23.6 percent growth, year-over-year, in net assets. Even deducting for the $5.2 billion in charitable gifts received from donors, these hospitals still registered an extraordinary 20.5 percent return on investment (ROI).
Additionally, these 82 hospitals spent $26.4 million on lobbying to defend the status quo. Because government money and charitable donations can’t be spent directly on lobbying, these hospitals used the payments from patients to lobby government to preserve their market position.
Perhaps these hospitals don’t want you to see how much things cost, because they don’t want you to know how much they are making.
It’s time to embrace the transparency revolution and open the books on the real prices paid by patients for healthcare services.
“One can spend hours on the phone tracking down the billing department only to hear from a lamenting administrator that they can’t share the negotiated price until after the procedure is performed. Then, weeks after the episode of care is over, an individual receives an outrageous bill in the mail that supposedly takes into account the “discount” for using an in-network doctor.
There’s no question that these convoluted pricing and payment schemes have contributed to higher health care costs and health insurance premiums. When consumers are kept in the dark, many providers can continue to increase prices simply because they can.
Price transparency is long overdue. Fortunately, some Oklahomans have been shaking things up in the health care industry long before President Trump’s promising executive order. For over a decade, Dr. Smith, co-managing partner at the Surgery Center of Oklahoma, has been leading the nation in true price transparency in his outpatient facility in Oklahoma City.”
Some believe the Individual Market is too weak to revive, given the hit it took as as result of the ACA.
I am optimistic that this ruling to utilize HRA is this manner will be a “shot in the arm” and revitalize the market again.
This article below highlights the benefits of a defined contribution approach as a means to purchase health insurance. Anything that makes us less dependent on ESI and gives more portability & options, freeing the labor market from job-lock is a good thing. – Forum for Healthcare Freedom
“Last week, the White House finalized a rule that allows employers to fund health reimbursement arrangements (HRAs) that can be used by workers to buy their own coverage on the individual market. This subtle, technical tweak has the potential to revolutionize the private health insurance market…
…The council found an elegant way to give employers the opportunity to voluntarily convert their health benefits from a defined benefit into a defined contribution. For example, an employer could fund an HRA for each worker and their family, which they could then use to shop for a plan that best suits their needs.”
The market is rising up in response to the price-distortions of the medical-industrial complex. The Kroger-GoodRx partnership is a huge end-run around the price-skimming cabal of PBMs and their Health Plan co-conspirators. – Robert Nelson, FfHCF
“More than 200 million prescriptions are left at pharmacy counters every year because people cannot afford to purchase them. The Kroger Rx Savings Club combines the power of Kroger’s nationwide network with GoodRx’s pricing technology to create a customer-first program that addresses the high cost of prescription drugs.”
Your Kroger Rx Savings Club membership includes:
Over 100 value priced generic medications specially priced at:
$3 (30-day) and $6 (90-day)
$6 (30-day) and $12 (90-day)
Select FREE medications
Exclusive Club prices on thousands of brand-name and generic medications
Coverage for up to 6 members (with a Family Membership)
“Preferred Provider Organization (PPO) A type of health plan that contracts with medical providers, such as hospitals and doctors, to create a network of participating providers. You pay less if you use providers that belong to the plan’s network.”
Oh really. The BUCA (Blue Cross, United, Cigna, Aetna) payers reimburse out of network hospitals at about 125% of Medicare while clearly reimbursing In-Network hospitals closer to 300% of Medicare on average. Most hospitals now have cash-pay initiatives at a rate of about 135% of Medicare, and Reference Based Reimbursement pays at average levels just above 150% of Medicare.
So, if you desire to pay more for healthcare services, the PPO model is your best option. The PPOs will charge you an access fee of $12 to $20 to have that option too. One last thing, since employers sign the inane PPO agreements they are legally bound to pay the excessive provider fees by contract. No wonder your healthcare expenses are so high.
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