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 advance-pricing, CPT billing, Economic Issues, Employee Benefits, Employer-Sponsored Health Plans, Healthcare financing, Medical Costs, medical inflation, Medicare, Network Discounts, Price Tansparency, Re-Pricing Scams, Uncategorized

The Urban Myth of PPOs | LinkedIn

“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.

Source: The Urban Myth of PPOs | LinkedIn

Posted in Economic Issues, Employer-Sponsored Health Plans, Health Insurance, Healthcare financing, Medicare, Network Discounts, Self-Insured Companies, Self-Insured Plans

Why the healthcare industry will eliminate PPO networks parts 1 and 2 | Michael (Mike) Dendy | Pulse | LinkedIn

Mike Dendy CEO/Vice-Chairman, AMPS, Inc

Since PPOs make their revenues off access fees with absolutely no responsibility to screen claims for accuracy and since their market value is directly tied to the number of physicians and facilities they have inside their networks, employers and their administrative payers’ demands for transparency have gone unmet over the last decade. This has led to the significant movement to eliminate PPO arrangements altogether as they not only provide no real value to the healthcare equation but in many cases promote a negative value. This is the efficient market theory at work, all elements within a market that do not add value to the overall market will eventually be eliminated.

Source: Why the healthcare industry will eliminate PPO networks parts 1 and 2 | Michael (Mike) Dendy | Pulse | LinkedIn

Posted in Access to healthcare, advance-pricing, Affordable Care Act (ObamaCare), Consumer-Driven Health Care, CPT billing, Crony Capitalism, Deductibles, Economic Issues, Free-Market, Government Regulations, Health Insurance, Healthcare financing, Independent Physicians, Medical Costs, medical inflation, Medical Practice Models, out-of-pocket costs, Patient Choice, Patient-centered Care, Policy Issues, Price Tansparency, Quality, Re-Pricing Scams, Uncategorized

Great Moments in Healthcare Consolidation: The Hospital is Having a Sale! | Robert Nelson, MD | Pulse | LinkedIn

What does the price of gasoline and the price of a chest x-ray have in common? Not much really, except the price of both have gone up in the Atlanta area recently; but the former did so for expected reasons that are predicated on behavioral economics and the relationship of demand to price. The latter went up, well, because it could.

But the sticker shock that I’ve experience lately trying to find a price on a simple chest X-ray is not due to any shortages (either perceived or real) or any sudden increase in demand. Nor was it from a sudden increase in the cost of performing an X-ray or some phenomenal increase in quality that created a better image or less radiation exposure. Nope, none of the usual factors that go into predicting price behavior were at play.

Source: Great Moments in Healthcare Consolidation: The Hospital is Having a Sale! | Robert Nelson, MD | Pulse | LinkedIn

One of the best pieces I’ve read that exposes the real cost drivers in healthcare. Many of us have been shouting from the rooftops that the “villains” we implicate are just symptoms of a more fundamental poison in that is embedded in our third-party billing system and the cartel-like system it has created. Thanks to Dave Chase for putting the pieces together so clearly. Given the realities exposed here, we can no longer implicate something that has been virtually wholly absent from the healthcare economy which could have prevented this generational theft: A free market. 

The Sovereign Patient

Dave Chase
Dave Chase – Forbes contributor

Mike Dendy: I hear the talking heads on business TV (like CNBC) talk about stagnation of incomes for the middle class. Wrong. The additional money is there every year, it’s just going into a pool to pay for healthcare instead of into the pockets of the employees in the form of salary increases.

Americans overpay for healthcare by at least 30% and likely 50% in aggregate. For all intents and purposes, every employer in America gives every covered member on their healthcare plan a blank check every year and says….consume all the healthcare you want, anywhere you want, anytime you want, and never be concerned with or ask the price because it’s all paid for. Deductibles and co-pays are irrelevant, especially to hospitals, because pricing is so high it becomes somewhat immaterial.

Trillions Have Been Redistributed from the American Workforce to the Healthcare Industry Creating An Economic Depression for the Middle Class The Washington Post and Vox have done excellent reporting that shows U.S. spends so much more than other countries for one simple reason — price. The good news is that some […]

Source: Have PPO Networks Perpetrated The Greatest Heist In American History?

Have PPO Networks Perpetrated The Greatest Heist In American History?

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