February 14th, 2007 by Dr. Val Jones in Opinion
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One of my readers recently asked for some examples of how price transparency might improve his lot. A great question! The people who stand to benefit the most from price transparency are the uninsured and those with high deductible health savings accounts. Price transparency is globally valuable because it allows people to understand the true cost of healthcare, making them more informed consumers. It also promotes accountability of hospitals, healthcare providers, and insurance companies.
Naughty Hospitals
Arbitrary fees:
“The cost for a total hip replacement in the greater Seattle area varied between $13,996 at one local hospital and $46,758 at another. Furthermore, there wasn’t necessarily any correlation between the cost of the procedure and the hospital’s quality or experience doing it. …Why would anyone pay a higher price for lower quality and potentially more complications, especially when it concerns your health?”
Where does a non-profit put its profits? Dr. Feld knows where:
“We are unable to know the hospital’s actual overhead. If we did, we could to find out what the hospital’s actual costs are. We could then calculate the hospital’s profit. These numbers are totally opaque.
Most hospitals are non profit hospitals. They can not post a profit at the end of the year. Therefore, they have to pour the extra money into something. Executive salaries and capital expenditures are a prime avenue for getting rid of their profit. A key question is how is the hospital’s overhead calculated? Maybe reducing costs to the consumer would be a good idea?”
“Predatory hospital billing:”
Over the past year, aggressive billing practices have been exposed at a number of hospitals in the United States. Despite the fact that a widower had paid $16,000 of his late wife’s bill of $18,740, some 20 years after the incurrence of the bill a teaching hospital held a lien on his home for $40,000 in interest. Many years earlier the hospital had seized his bank account, and now the 77-year-old man was destitute. Only tremendous publicity caused the hospital to back down. In California, a patient was forced into bankruptcy in 2000 by a for-profit hospital from a day-and-a-half stay in the hospital that did not include any surgery but totaled $48,000 in hospital bills. These have become common stories as hospitals aggressively market, bill, collect, and foreclose, just like any other corporation. The uninsured are facing the brunt of the hospital industry’s billing practices.
Naughty Outpatient Facilities
“Mr. Smith needs to get an MRI. He has a high deductible HSA, with a $2000 deductible, much of which he has not yet spent. So he will likely have to pay for 100% of this service himself. Without access to cost information by facility, he would simply go to a convenient, local facility and might pay up to $1300 for this single test. If he had access to health care cost information on the web, he could look up the cost of his service across different facilities and choose to go to the one that only charges $450 – a very meaningful difference for Mr. Smith.”
“More than 3 million people have already signed up for HSAs, and 29 million are projected to do so by 2010. Forty percent of the people who bought HSAs have family incomes below $50,000. More than a third of those who bought HSAs on their own had previously been uninsured.”
Naughty Doctors
What happens when 2 procedures have been shown (through careful research) to have equal efficacy, but one is reimbursed at a much higher rate? Docs will choose to perform the more expensive one, of course.
“Prostate cancer patients’ biggest concerns — after cure — are the possible side effects of surgery, including urinary incontinence and sexual impotency. Data on these side effects from robotically assisted prostatectomy were sketchy at best, and no evidence was available to indicate that any surgical method emerged as better than another for these side effects… Open radical prostatectomy costs $487 less a case than non-robotic laparoscopy and $1,726 less than robot-assisted prostatectomy.”
Naughty Insurance Companies
Insurance companies don’t want to make their pricing public because they don’t want their competition to know how much (or how little) they’re compensating physicians. Therefore, consumers are prevented from seeing costs as well – which can hinder their ability to make informed decisions about their care.
I bet others can think of some excellent reasons why price transparency is beneficial to consumers. Care to contribute?
This post originally appeared on Dr. Val’s blog at RevolutionHealth.com.
February 14th, 2007 by Dr. Val Jones in Medblogger Shout Outs, Opinion
3 Comments »
In my last blog post, I unwittingly evoked vehemence on the part of those pro/con a single payer model for healthcare. And so in this post I’d like to offer some more food for thought (while attempting to dodge the high velocity tomatoes):
First of all, Dr. Reece summarizes things nicely, suggesting that this debate is not entirely resolvable:
Incompatible Mindsets
• If your mindset is that government’s moral duty is to redistribute resources to protect the health of all, and that health is directly related to the extent of health system coverage, you think and receive information in a certain way. You generally attribute superior health statistics of other nations to universal coverage, even if these other nations have more homogeneous, smaller populations, and different cultures.
• If your mindset is that private markets provide the best care for most of the people most of the time, provide better access to high technologies, give more health care choices to citizens, distribute resources more efficiently and that the health of the people is more related to cultural behaviors and a nation’s heterogeneous population, you receive information in completely different way.
The Unending Argument
The power and efficiency of government vis-à-vis the power and efficiency of markets is a never-ending argument – an argument unlikely to change mindsets. To progressives, it’s a moral argument: to conservatives, it’s an exercise in reality. You can marshal persuasive arguments on both sides, without convincing either side who is right.
An economics blogger explains why extending Medicare benefits to all would not succeed:
The dirty little secret behind Medicare is that it works only because it does not cover every American. Part of the reason for this is that Medicare’s payment structure is designed to pay doctors and hospitals in such a way as to limit total spending, rather than to ensure they can break even. Clearly, they have to do better than break even to stay in business, and the people running Medicare know that. Medicare depends on the fact that there are lots of non-Medicare patients out there who (through their private insurance) can pay enough to keep the doctors and hospitals in business. This is called “cost shifting.”
Whether pro/con single payer system, I think that we nearly all can agree on one thing: price transparency is morally right. It’s hard to fix a system if you don’t really know where the money is coming from or going to. I think it would be nice to have people on both sides of the debate work together for that common goal first. Would you agree?
This post originally appeared on Dr. Val’s blog at RevolutionHealth.com.
February 11th, 2007 by Dr. Val Jones in Opinion
4 Comments »
Imagine if you went to the grocery store to purchase a week’s worth of groceries – once in the store you had to select items without price tags or any labels suggesting which items were more expensive than others. In addition, all the items were behind counters, so that you had to ask for them from store personnel (and cannot inspect them at close range) who wrapped them in opaque paper and initialed them before handing them over. You were paying a monthly fee to be a store “club member” to get discounts, but were not told what those discounts might be.
So now once you’ve gathered all your groceries you stand in the check out line. The person in front of you is complaining about the outrageous price of her groceries, while the clerk responds that she didn’t force her to shop at the store or select those groceries, that it would have been cheaper if she were a club member, and that higher prices were assessed based on the individual store personnel initials that were on her paper wrapped items. The clerk also tells her that she cannot return any items (as once they’re wrapped, they’re considered non-refundable – and that she will be reported to a debt collection agency if she does not pay). The shopper is outraged, but since she doesn’t want her credit ruined, and there are no other stores within 100 miles, she pays the price and leaves.
Your turn comes to check out. You’re a club member so your bill is substantially less, but you can’t be sure what the individual items cost or which fees were added based upon the various initials written on the white paper. In fact, you have a feeling that the store staff added some additional packages to your cart when you weren’t looking, but you can’t be sure because of the wrapping. You pay your bill, go home, and find as you unwrap your groceries that at least half of the things you bought were not what you thought they were (or what you wanted), and that there were indeed extra items in there that you never asked to buy.
What kind of crazy scenario is this? It’s a simplified analogy of our healthcare system. The shoppers are patients, club membership is insurance, stores are hospitals, grocery wrappers are healthcare providers, and clerks are the hospital administrators. I also emphasized the lack of price transparency that is inherent in the system.
If grocery stores were actually like this, there would be a violent, nationwide revolt within days. Are consumers ready for a revolution in healthcare? I hope they are, because their collective bargaining power is probably the only thing that will force price transparency and system-wide improvements. But to make this happen, consumers should consider a few key points:
- A single payer model is nothing more than taking the grocery store system we already have and asking the store to accept a new club card whereby staff will decrease the size of the grocery items (by 50%) to those members. One of the best quotes I’ve read about the certain doom of a single payer system was recently posted in GruntDoc’s blog.
- Price transparency is the most important initial step to consumer empowerment and should be at the top of the lobbying list.
- Doctors are not the bad guys, the system is the bad guy. Physicians and patients must ally with one another to demand improvements. The AMA has taken a strong stand in favor of the consumer driven healthcare movement.
- Consumers must become active participants in their care. They need to educate themselves about their diseases and conditions and focus on early intervention and preventive medicine. As resources become more and more scarce, and the US population becomes older and sicker, healthy living practices provide the only real hope of relief from the complications of advanced disease. As Dr. Feld notes in his blog, 80% of healthcare dollars are spent on complications of chronic diseases!
I think that Revolution Health can play a critical role in consumer empowerment. Here at the “Web 2.0” social network intersection between healthcare professionals and patients, RHG can help consumers take control of their health (via education and peer support), and join forces with others like them to revolt against this unacceptable and bizarre “grocery store” system that we have in place!
This post originally appeared on Dr. Val’s blog at RevolutionHealth.com.
February 7th, 2007 by Dr. Val Jones in Medblogger Shout Outs
4 Comments »
Well, this conversation from the blogosphere gets my blood boiling, I can tell you! In a recent blog post about the ugly under belly of hospitals, I discussed how administrator salaries decrease hospital resources. Dr. Stanley Feld’s excellent blog post digs even deeper:
Paul Levy CEO of Beth Israel Hospital writes a blog called “Running a Hospital”. He has tried to justify his salary after the Boston Globe published his salary of over 1 million dollars per year…
Remember hospitals such as Beth Israel Hospital in Boston are tax exempt community hospitals because they have this community obligation. These tax subsides and others tax subsides are opaque to the public. However, the public pays for these subsides. They contribute to the hospitals bottom line and Mr. Levy’s bonus.
Linda Halderman M.D. wrote an essay entitled “How Much is Your Doctor Worth?”. It is also worth reading. The subtitle should be, “How Much is Your Doctor paid?” The answer after the long essay is $59.50 for a complicated office visit. [If Levy were a clinician,] he would only have to see 168,067 patients in one year or 744 patients a day to generate a gross revenue of $1,000,000 before expenses.
What is more valuable to the healthcare system? A CEO’s salary based on revenue generated incentives and fund raising or good quality medical care?This post originally appeared on Dr. Val’s blog at RevolutionHealth.com.
January 25th, 2007 by Dr. Val Jones in Opinion
3 Comments »
Our Chief Privacy Officer sent me an interesting article today about how hospitals are promoting “disclosure and apology” (by physicians to patients or their families) when a medical error is committed. The report suggests that less money will be spent in malpractice suits if physicians fess up to their mistakes instead of trying to hide them.
Another study suggests that 99% of physicians believe that it is morally right to confess errors to patients and family members, but that only about 33% report doing so. The article says that the number one reason why they don’t report errors is fear of being sued.
While these statistics don’t reflect well on physicians, I think there’s some murkiness here that’s worth reviewing. First of all, what constitutes an error? When a young resident physician performs a procedure in an inferior manner due to lack of experience, is that an error? When a code team is not called soon enough because a patient doesn’t appear gravely ill initially, is that an error? If an unconscious patient arrives in the ER and is treated with a medicine that causes a life-threatening allergic reaction, is that an error? I think that many times physicians perceive some “errors” as unfortunate and regrettable aspects of the natural practice of medicine and don’t report them formally.
Another reason why physicians may not report errors is because it’s unclear that the error has a specific adverse effect – perhaps a patient’s Tylenol was given at the wrong time of day. That’s an error – but is it worthy of formally reporting it to the patient? What about when the lab loses the tube of blood drawn from a patient? Should the patient be told about it or should the labs be added to the next day’s scheduled draw?
The majority of “errors” that I’ve witnessed are in the realm of sub-optimal care due to inexperience, inattentiveness, or misinterpretation of test results. However, errors of the sort that result in death and serious harm appear to be alarmingly frequent (some studies argue that there are 40-90 thousand of these errors per year).
I think that physicians should always tell patients the truth about their care, the risks associated with certain procedures, and the full range of choices that are available to them. I do believe that patients value (and deserve) to know the truth – even when it makes the physician or hospital seem less than perfect. In the cases of errors that result in serious consequences – honesty is the best (and only) policy.This post originally appeared on Dr. Val’s blog at RevolutionHealth.com.
