Sunday, March 14, 2010

How to Save Money on HealthCare

Nope. Not Obama/AbortoCare.

Torinus has a very good suggestion.

He begins with legislation introduced by Sullivan (D) and Richards (D), which would require that 'doctor prices' be made public. We agree that it's a start.

The new law will require hospitals, clinics and doctors to make available median prices. What that will mean in the real world is that providers will list their charges - their retail prices - and then show an average discount across all procedures.

But Torinus prefers that the law require "bundling" prices be made public, too.

If prices were bundled, payers, including consumers, could track price increases a lot more effectively. The present system allows invisible and runaway prices.

And the huge variations in prices - as much as 300% in the Milwaukee area - would jump out at consumers. If a hospital price for a hip replacement is $18,000 at one highly rated facility, why would anyone buy at $40,000 at another hospital in the same region?

Because of the fog, payers often get that costly decision wrong. The opacity keeps the overpriced facilities in business.

OK. We know that.

...there's still a lot of work to do on the transparency front. The real end game has to be bundled prices, which include all costs for an episode of care. Get rid of the multitude of line items, which makes bills undecipherable. Get to one bill for everything to do with a procedure, say $25,000 for a new hip.

Torinus managed to get that deal, "bundling prices" with his insurance broker, so all his employees know where the best price (AND QUALITY) is. Good work, John!

So: how to get "bundling" prices, not just 'doctor' prices, out in the open?

Wisconsin could make its prices for buying health care for its own employees and for Medicaid recipients public record. Because of its large claims base, state government could pull the line items together and publish bundled prices for state employees and Medicaid.

The discounts for state employees would be different than for other plans, but not that much different. The Medicaid prices would provide a benchmark on the low end of the pricing spectrum.

A very good idea, indeed.

3 comments:

Deekaman said...

I've been talking about this for close to a year. If people know what they are paying, they will be more careful with their $$$.

I would alos add that we need to get away from what amounts to "prepaid healthcare" and get back to the catastrophic medical insurance of 30 or 40 years ago.

John Foust said...

Back into something... Blunt instrument... Births with complications could be carved out... Pierce the fog... Wow, interesting choices of words.

And "Caesarian deliveries are less complicated and time consuming for doctors than many normal births, when the doctor has to wait around for junior to arrive." Hilarious! Please, Torinus, please meet with your local hospital birthing staff. You honestly think the (one?) doctor is there "waiting around" and that there might be a significant savings if they - what? - weren't there? Had an assembly line of in-labor mothers? That invasive surgery is safer with less expensive complications than a vaginal birth? Reaching back to your past proposals for cheaper health care, why not send pregnant mothers to India for cheaper pre-natal care and birthing?

The JSonline commenter 1stAmend's views are naive, too. Paying quick cash might be possible at a mom-and-pop doctor or dentist for clearly circumscribed procedures, but most hospitals and doctor's offices who are part of a larger conglomerate cannot even begin to tell you how much your procedure will cost, even for something as simple as a physical. They are focused on insurance reimbursement. They'll send a bill weeks later.

Dad29 said...

most hospitals and doctor's offices who are part of a larger conglomerate cannot even begin to tell you how much your procedure will cost, even for something as simple as a physical

Not true. About 10 years ago I had a list (samizdat from a pal) of prices for all procedures--Drs. and hospitals--for Greater Milwaukee. That list showed the "list price" and "discounted price for insurance companies".

It's not a problem for a hospital to print it up, except they don't WANT to.