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Thread: Price transparency in health care

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    Price transparency in health care

    Quick anecdote. A few months back our 5-year old had white streaks and a very sore throat, and I suspected strep. I took him to the doctor ($35 copay) to find out if it was indeed strep, in which case he'd get antibiotics so that he could return to school sooner, or find out it was viral in which case he could return to school. Doctor swab tests on site and determine's it's not strep, but says by company policy they send swabs to a second round of testing just to be sure. I asked what the rate of false-negative for on-site testing was and he said significantly less than 1%. I asked how much this all costs and he said he had no idea, and that it depends on insurance. I didn't question him further and we left.

    But on the way home I asked my wife to get onto the health system's website to find out the billable rate for the strep culture lab test, and found out it was either $280 or $560, depending on which was ordered. Being well within our deductible, that would be all our cost. I called back and demanded they cancel that order.

    My reaction to all this was that, first of all, billing $280 to $560 to double-check a usually non-lethal childhood illness seems medically unnecessary to me. Second, doctors should know or be able to easily check the cost of what they're recommending so that the cost vs. benefit can be discussed with patients.

    But then more recently I started thinking about health care price transparency in general and trying to understand why there isn't better transparency and what the arguments are for and against.

    I ran across evidence (Characterizing Health Plan Price Estimator Tools: Findings From a National Survey) that not only to health plans and, in many cases, provider systems, make cost information available, but extremely few seem to be looking or caring. As few as 2% use web-based tools for determining health care costs.

    This gets me thinking, there was really no reason why I couldn't have determined in advance the cost or potential costs of the strep testing before taking my kid to the doctor. If I had known, I might have gone in to the doctor and said "I want an on-site strep test but I do not consent to any additional follow-up or secondary testing." That might piss some doctors off to have patients coming in demanding specific things and refusing others, but that is what I should have done. I cannot abdicate all responsibility for situations like the one I encountered and "blame the system" when the system avails the information to me and I choose not to look.

    If a vast majority of Americans aren't even interested in the cost of health care even when it's made available to them, then by default we are entrusting the entire responsibility for controlling health care costs onto a combination of government and insurance companies, because we refuse to take responsibility for ourselves as patients. Consumers determining exactly what they want and are willing to pay for is the most organic and effective form of cost control there is, and collectively we're refusing to do it.

    I'd be interested to hear from people what they specifically think would be necessary and effective at incorporating more patient-driven cost control into our health care system.

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    Re: Price transparency in health care

    Quote Originally Posted by Neomalthusian View Post
    I'd be interested to hear from people what they specifically think would be necessary and effective at incorporating more patient-driven cost control into our health care system.
    I know there's many issues with the current healthcare, but one thing that really bugs me is that doctors can bill by the hour and can talk to you for 5 minutes. Now imagine if that doctor talked to 10 people for 5 minutes a piece and billed the insurance for 10 hours for a essentially a total of 1 hour of work. I'm not sure how that is even legal to be honest. At least when I go see a lawyer, they bill me by the minute. That's not even counting the cost of the visit, the nurse, equipment, ect. That is just what the doctor themselves charge.
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    Re: Price transparency in health care

    Quote Originally Posted by Praxas View Post
    I know there's many issues with the current healthcare, but one thing that really bugs me is that doctors can bill by the hour and can talk to you for 5 minutes. Now imagine if that doctor talked to 10 people for 5 minutes a piece and billed the insurance for 10 hours for a essentially a total of 1 hour of work. I'm not sure how that is even legal to be honest. At least when I go see a lawyer, they bill me by the minute. That's not even counting the cost of the visit, the nurse, equipment, ect. That is just what the doctor themselves charge.
    If a price is set based on a certain amount of time, this is insurance fraud.

    Some services, on the other hand, are allowed to be performed by multiple individuals, so for example a CNA or other assistant role can spend most of the time gathering the necessary information, because thereís no real reason why a doctor has to be the one that gathers basic info that could be gathered by anyone. But despite multiple individuals being involved, there is one payment for that service, and it encompasses all of it.

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    Re: Price transparency in health care

    Quote Originally Posted by Neomalthusian View Post
    If a price is set based on a certain amount of time, this is insurance fraud.

    Some services, on the other hand, are allowed to be performed by multiple individuals, so for example a CNA or other assistant role can spend most of the time gathering the necessary information, because there’s no real reason why a doctor has to be the one that gathers basic info that could be gathered by anyone. But despite multiple individuals being involved, there is one payment for that service, and it encompasses all of it.
    And that's just it, when I saw the breakdown of services, they went by individual and many were listed as 1 hour when at most I talked to all them for a total of maybe 15-20 minutes.

    Now granted, I'm just one person but if this place is doing this for thousands of people that adds up quite quickly.
    Quote Originally Posted by Logical1 View Post
    Which is greater, the life of the baby or a womans "rights"??????
    Quote Originally Posted by Praxas
    Yes, we know that you don't care Trump bragged about walking in on underage girls naked.
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    And that bothers you because????????

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    Re: Price transparency in health care

    Quote Originally Posted by Praxas View Post
    And that's just it, when I saw the breakdown of services, they went by individual and many were listed as 1 hour when at most I talked to all them for a total of maybe 15-20 minutes.

    Now granted, I'm just one person but if this place is doing this for thousands of people that adds up quite quickly.
    Well that really should be an easy one, because regardless of whoís paying or managing care/payment, if the rate is based on a duration of time, the duration of time needs to be satisfied. Itís just inherently fraudulent to base a price on a period of time and then not satisfy the duration but be entitled to that rate.

    That may be a problem in some cases, but I see that is a bit different from price transparency in general, especially the type of price transparency that would enable patient to control costs and reduce overutilization or over-billing.

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    Re: Price transparency in health care

    Quote Originally Posted by Neomalthusian View Post
    If a vast majority of Americans aren't even interested in the cost of health care even when it's made available to them, then by default we are entrusting the entire responsibility for controlling health care costs onto a combination of government and insurance companies, because we refuse to take responsibility for ourselves as patients. Consumers determining exactly what they want and are willing to pay for is the most organic and effective form of cost control there is, and collectively we're refusing to do it. interested to hear from people what they specifically think would be necessary and effective at incorporating more patient-driven cost control into our health care system.
    And what about the patients who aren't as involved or as savvy as you? That's probably...giving you the benefit of the doubt, over 50% of the population..the elderly, etc. No, the idea that random people are going to be savvy enough to understand the risks and needs of the most complex system we have (health), is not the way to go. And the issue you mention (if it's even an issue), is something that can be solved in any number of ways.

    We *do* need transparency and more rules and regulations, much of which should be dictated by the medical community, that governs health care. Big-data and a well-funded regulatory private/public oversight board that helps us manage it, is what I'd guess will help. A well-managed process *should* afford for feedback from patients. But I don't think they can give you a person to answer and still keep costs low. They would need to get this electronically and manage the millions of feedback using priorities and grouping, etc.

    Countless lives are cut short and quality of life is reduced, because we have not come together as a society and admit we all need to address this collectively. You know who opposes it.

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    Re: Price transparency in health care

    Quote Originally Posted by Praxas View Post
    I know there's many issues with the current healthcare, but one thing that really bugs me is that doctors can bill by the hour and can talk to you for 5 minutes. Now imagine if that doctor talked to 10 people for 5 minutes a piece and billed the insurance for 10 hours for a essentially a total of 1 hour of work. I'm not sure how that is even legal to be honest. At least when I go see a lawyer, they bill me by the minute. That's not even counting the cost of the visit, the nurse, equipment, ect. That is just what the doctor themselves charge.
    In my logistics company I have a four hour minimum charge, that does not include afterhours surcharges. It does not matter if I am done in four hours or a minute. I do that so if I am called out to move something I have an expectation of some bit of minimum compensation. Normally with what we do its normally about 2.5 to 3.5 hours to get a man to the where the material to be moved is located loaded moved and offloaded and then proceed to the next call or return to the shop. All my customers know this because I give them sales sheets every quarter and let them know at the time they order the material move.

    Doctors when they see you for five minutes dont just see you. They also have to document and chart what they said to you and what they do. This takes time and probabley personal and is something patients do not normally see. This may or may not consume a full hour, but one can presume that is their minimum charge for the service to cover their expenses and compensate for their time and knowledge.


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    Price transparency in health care

    Quote Originally Posted by Mach View Post
    And what about the patients who aren't as involved or as savvy as you? That's probably...giving you the benefit of the doubt, over 50% of the population..the elderly, etc. No, the idea that random people are going to be savvy enough to understand the risks and needs of the most complex system we have (health), is not the way to go. And the issue you mention (if it's even an issue), is something that can be solved in any number of ways.
    Iím interested in those number of ways.

    We *do* need transparency and more rules and regulations, much of which should be dictated by the medical community, that governs health care.
    The medical community has a vested interest in NOT controlling the cost of healthcare, and instead presenting itself as the expert whose opinion should be what determines what turns the money spigot on and off.

    Big-data and a well-funded regulatory private/public oversight board that helps us manage it, is what Iíd guess will help. A well-managed process *should* afford for feedback from patients. But I don't think they can give you a person to answer and still keep costs low. They would need to get this electronically and manage the millions of feedback using priorities and grouping, etc.
    I donít think price transparency is ever really going to matter to people until they start sharing in more of the direct costs of their own care. This is what I like least about recent Medicare for all proposals, because they advertise themselves as eliminating all patient cost-sharing as well as eliminating insurance companies, which concentrates the cost containment responsibilities onto a federal bureaucracy. Relative to patients who stand to lose their own money, or insurance companies who stand to incur losses if they cover too much (or customers if they cover too little), a federal bureaucracy is always going to lack inherent cost controls incentives. It lacks the aversion to financial losses that a private individual or company does, and it also lacks the fear of losing customers because everyone is an involuntary participant.
    Last edited by Neomalthusian; 12-22-18 at 01:46 PM.

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    Re: Price transparency in health care

    Quote Originally Posted by Praxas View Post
    I know there's many issues with the current healthcare, but one thing that really bugs me is that doctors can bill by the hour and can talk to you for 5 minutes. Now imagine if that doctor talked to 10 people for 5 minutes a piece and billed the insurance for 10 hours for a essentially a total of 1 hour of work. I'm not sure how that is even legal to be honest. At least when I go see a lawyer, they bill me by the minute. That's not even counting the cost of the visit, the nurse, equipment, ect. That is just what the doctor themselves charge.
    If you get face-to-face time with a provider in an office setting they're usually getting reimbursed via what are called evaluation and management codes. Those fall into one of five levels, scaling with the complexity of the visit and time spent with the patient. Obviously as you go up the ladder the reimbursement level increases.



    So they're not just billing you for an hour of their time regardless of the contents of the visit.

    (A proposal by the Trump administration to reduce the number of possible levels Medicare pays for in exchange for reducing the documentation requirements for proving how complex the visit was turned into a whole thing earlier this year: https://www.debatepolitics.com/break...s-doctors.html (Trumpís overhaul of Medicare payment angers doctors)).

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    Re: Price transparency in health care

    Quote Originally Posted by Neomalthusian View Post
    I'd be interested to hear from people what they specifically think would be necessary and effective at incorporating more patient-driven cost control into our health care system.
    It's worth thinking through major reasons it doesn't happen now. Iíd say the big ones are:

    Consumer behavior and market structure. To date, people have resisted acting like consumers with respect to health care, even as cost-sharing has grown. The reasons seem to be a mix of the practical and the ideological. They've lacked the tools to even obtain comparative price information, though that's starting to change. Similarly, they've lacked the financial incentive to obtain and use such information, though that's starting to change.

    But beyond that, pricing in health care has never really been designed for a real consumer market, which limits the utility of price comparison tools. (In part this may be because only a minority of health spending is on services that would be considered "shoppable".) Prices are often not individually rational because the focus is on an aggregate financial package negotiated at the level of organizations, not individual prices brought to the market for consumer consideration.

    Equally important, providers aren't bringing distinct care bundles to market with easily comprehensible price tags. Youíve often got to figure out which CPT code(s) are relevant to your situation and try to work through which additional fees might get tacked on in various circumstances and settings. Sometimes thatís not too hard, sometimes itís very hard. And even if you could easily do that, people tend not to view their provider relationships as strictly transactional relationships in the market, which means in practice youíre fighting a very strong sort of brand loyalty if you want people to start price shopping for providers. Which leads into the next one:

    Clinical practice patterns. The health care provider landscape is a mishmash of provider relationships and clinical affiliations. Because of people's willingness to trust their providers' recommendations, their decisions will tend to follow the contours of existing referral patterns in their market. If the market continues its march toward making integrated provider systems financially accountable for their patient populations, then provider systems have ever more incentive to tighten up the referral patterns of their providers and prevent leakage outside their system. So unless people become more predisposed to disregard their provider's advice and clinical relationships, normal market dynamics will be pretty hard to achieve. Beyond the clinically valid reasons providers might guide or restrict choice, there are more self-serving ones:

    Provider behavior. There are steps provider organizations take to intentionally stymy price transparency or its goals. They might impose contractual restrictions on payers sharing price information. Or, to the extent they can manipulate at the negotiating table the pricing methodology that payers use to compensate them, they could shift revenue from shoppable services to services behind the veil. So maybe they drop prices on low-end imaging services or even big-ticket shoppable services like knee replacements (e.g., if the payer institutes a reference pricing scheme for that service) but compensate by negotiating to spread that forgone revenue across a variety of inpatient services that aren't shoppable. Then people could act like the most perfect homo economicus imaginable, it still wouldn't hold down health spending.

    Payer strategies. To the extent that payers keep moving in the direction of value-based reimbursement, you could get to a point where rewarding higher-performing providers with higher prices penalizes them in a consumer market. (Weíre not quite there yet but itís something to think about.)

    Those are pretty strong headwinds working against the hope of creating a workable consumer market for health services.

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