Posted in Access to healthcare, advance-pricing, CPT billing, Economic Issues, Health Insurance, Healthcare financing, Medical Costs, Medicare, Network Discounts, out-of-pocket costs, Patient Choice, Policy Issues, Uncategorized

Fallacy of the Discount: Why Price Transparency Matters

Why is the price of a CT scan 33 times higher in a hospital emergency room than in an outpatient imaging center just down the street?https://www.npr.org/sections/health-shots/2018/04/09/598794123/bill-of-the-month-a-tale-of-2-ct-scanners-one-richer-one-poorer

Hynden was shocked when he got the second CT scan in January, and the listed price was $8,897 — 33 times what he paid for the first test.

Gulf Coast Medical Center is part of his Cigna insurance plan’s approved network of providers. But even with Cigna’s negotiated discount, Hynden was on the hook for $3,394.49 for the scan. The additional ER costs added $261.76 more to that bill.

The higher price from Gulf Coast and its parent company could be a result of their enormous pricing power in Fort Myers, says Gerard Anderson, a professor of health policy and management at Johns Hopkins University.

Lee Health owns the four major hospitals in the Fort Myers area, as well as a children’s hospital and a rehabilitation hospital, according to its website. It also owns several physician practices in the area. When you drive around Fort Myers, the blue-green Lee Health logo appears on buildings everywhere.

“Anybody who’s in Fort Myers is going to want to get care at these hospitals. So by having a dominant position, they have great bargaining power,” Anderson says. “So they can raise their rates, and they still do OK.”

Anderson says his research shows hospital consolidation has been driving prices higher and higher in recent years. And because more and more people, like Hynden, have high-deductible insurance plans, they’re more likely to be on the hook for huge bills.

So Lee Health and other dominant hospital systems mark up most of their services on their master price lists — the list that prices a CT scan at Lee Health at $8,897. Anderson calls those lists “fairy-tale prices” because almost no one actually pays them.

“Everybody who’s taken a look at it agrees — including the CFO of the organization — that it’s a fairy-tale thing, but it does have relevance,” Anderson says.

The relevance is that insurance companies usually negotiate what they’ll pay at discounted rates from list prices.

So from the master price of $8,897, Cigna negotiated Hynden’s bill down to $5,516.14 — a discount of almost 40 percent. Then Cigna paid $2,864.08, leaving Hynden to pay the rest.”

https://www.npr.org/sections/health-shots/2018/04/09/598794123/bill-of-the-month-a-tale-of-2-ct-scanners-one-richer-one-poorer

Posted in Access to healthcare, Affordable Care Act (ObamaCare), DC & Related Shenanigans, Economic Issues, Government Regulations, Government Spending, Healthcare financing, Medical Costs, medical inflation, Medicare, News From Washington, out-of-pocket costs, Policy Issues, Reforming Medicare, Uncategorized

Best Kept Secret In Washington DC: The Future Of Medicare – Forbes

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John C. Goodman

The fact that Medicare has been put on a sound financially footing – for the first time in its history – has never appeared in any official government announcement. Ditto for the fact that the disabled and the elderly may bear a heavy cost along the way.

These facts have not been in the headlines of any major newspaper. They have not been addressed in any news article. To my knowledge they have never been discussed in any opinion editorial. Even more surprising, they are repeatedly ignored by scholars and in scholarly reports at think tanks around the country (other than my own).

Eerie as it may seem, the entire country has been acting as though these incredible public policy changes have never occurred.

Here is a third thing l bet you don’t know. Although Republicans have criticized the “Obama cuts in Medicare spending” as threatening access to care for the elderly, the GOP alternative essentially does exactly the same thing.

What no one bothered to discuss was the much bigger budget story: an enormous reduction in future Medicare spending and its impact on the health and financial well-being of the 54 million people in Medicare.

Here is a bit more detail.

Source: Best Kept Secret In Washington DC: The Future Of Medicare – Forbes

Posted in Access to healthcare, advance-pricing, CPT billing, Deductibles, Direct-Pay Medicine, Economic Issues, Employee Benefits, Free-Market, Health Insurance, Healthcare financing, Medical Costs, Medical Practice Models, Medicare, Network Discounts, out-of-pocket costs, Patient Choice, Policy Issues, Price Tansparency, Uncategorized

Free The Patient – Forbes

257e412251dd752f730fd7cb60c52ee2
John C. Goodman

Who is likely to negotiate the lowest fee with a doctor, hospital or some other health care provider? The federal government? A large employer? An insurance company? Or, a patient spending her own money? Strange as it may seem, the answer is often the patient. One of the most persistent myths on […]

Canadians coming to the United States (and paying a cash price upfront) were paying almost half as much as US employers were paying and even less than the typical payment by Medicare. Think about that. These patients not only lacked a big bureaucracy to bargain on their behalf; they were foreigners.

The other factor is third party payment. After the deductibles and copayments are exhausted (which is almost immediately in the case of a knee replacement) the only payer is the third party. The incentive of the hospital is not to lower charges, but to raise them. In fact hospitals typically try to maximize against third-party payment formulas and they have sophisticated computer programs to help them do it.

An individual patient, paying with his own money and willing to travel to another city for care, is a different kind of buyer. If the hospital wants his patronage, it has strong incentives to compete on price.

This very large insurance company, representing tens of thousands of people and their very large employer (the state of California), achieved a remarkable reduction in costs by doing nothing more than sending patients into the hospital marketplace with the knowledge that the money they had to spend totaled no more than $30,000.

http://edge.quantserve.com/quant.js

Source: Free The Patient – Forbes

Posted in Access to healthcare, advance-pricing, Affordable Care Act (ObamaCare), Consumer-Driven Health Care, Deductibles, Defined Contribution Benefit Plans, Direct-Pay Medicine, Economic Issues, Employee Benefits, Employer-Sponsored Health Plans, Essential Benefits under the ACA, Federal Exchanges, Free-Market, Government Spending, Health Insurance, Health Reimbursement Arrangement (HRA), Health Savings Accounts (HSA's), Healthcare financing, Independent Physicians, Individual Mandate, Individual Market, Individual ObamaCare Market, Individual Underwriting Standards, Insurance subsidies, Liberty, Medicaid, medical inflation, Patient Choice, Patient-centered Care, Policy Issues, Pre-existing Conditions, Price Tansparency, Private Exchanges, Quality, Reforming Medicaid, Self-Insured Companies, Self-Insured Plans, State-Run Insurance Exchanges, Subsidies, Tax Policy, Uncategorized, Uninsured

All the Problems plaguing ObamaCare are Solved by These 12 Bold Ideas

The Sessions – Cassidy bill:

Source: Summary | Goodman Institute for Public Policy Research

Posted in Access to healthcare, Consumer-Driven Health Care, Deductibles, Economic Issues, Health Insurance, Medical Costs, Price Tansparency

How to Really Stretch Your Healthcare Dollars | Robert Nelson, MD | LinkedIn

AAEAAQAAAAAAAAOpAAAAJGU4YWVhMDc5LTVlMjQtNGZiZS1hMDljLWJlYzJkNmYxMjY0OAThere is nothing wrong with a little friendly financial heads-up advice regarding insurance.  But below the surface, what does all this advice say about the inflated costs of the healthcare system in which we are obliged to navigate, specifically the role of “insurance” in driving those costs?

But there is something more telling about the underlying dysfunction of our third-party billing system based the advice many are doling out, and something you won’t find when evaluating cost-savings strategies in any other industries. 

Read entire article via How to Really Stretch Your Healthcare Dollars | Robert Nelson, MD | LinkedIn.

Posted in Economic Issues, Health Insurance, Medical Costs, Policy Issues, Price Tansparency

Out-of-Pockets: What They Really Mean | Robert Nelson, MD | LinkedIn

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Some things are so familiar or so close to “us” that we don’t see them for what they really are.  Take the case of the famous vision impaired artist depicted above, Claude Rhinoir.  His tendency to misinterpret his surroundings is a result of his inability to correctly identify something that he lives with everyday.

Such it is with our healthcare landscape, being littered for decades with misplaced oddities such that we don’t even notice them anymore, let alone question their purpose.

And here is the lesson that Claude’s repeated misinterpretation should teach us: Please understand that the concept of “out-of-pocket” expenditures in healthcare is an anomaly caused by our bizarre third-party payment system in healthcare; we call this the billing cycle and it is unique to healthcare financing. Yes they are real, just like Claude’s horn, but completely unnecessary in the picture.  And these out-of-pocket costs are grossly inflated, being based on inflated billed charges to begin with; nor would they even exits in most cases if not for the intrusion of third-party payers into the arena of routine healthcare.

Read the entire article at Out-of-Pockets: What They Really Mean | Robert Nelson, MD | LinkedIn.

Posted in Affordable Care Act (ObamaCare), Deductibles, Economic Issues, Employee Benefits, Medical Costs, News From Washington, DC & Related Shenanigans, Patient Choice, Pre-existing Conditions, Uncategorized

Five Things To Know About Obamacare Premiums: A Guide For The Perplexed « Concierge Medicine Today

Five Things To Know About Obamacare Premiums: A Guide For The Perplexed « Concierge Medicine Today.

Posted in Affordable Care Act (ObamaCare), Economic Issues, Employee Benefits, Medical Costs, News From Washington, DC & Related Shenanigans, Patient Choice, Price Tansparency, Quality, Uncategorized

Popular Provision Of Obamacare Is Fueling Sticker Shock For Some Consumers – Kaiser Health News

Popular Provision Of Obamacare Is Fueling Sticker Shock For Some Consumers – Kaiser Health News.

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