Transparency: Hospital and Inpatient Care

By pjain      Published Aug. 1, 2019, 1:27 a.m. in blog Health   

Hospitals, Doctors CONTROL and push up costs!

This Provider Control is behind the 15+% annual rise in Health care costs

Keep raising prices for

Provider Control: Concentration Matters

Provider Control: Hospital and Inpatient Care Current Black Box on Pricing

Secrecy that has long surrounded what patients, employers and insurers actually pay for medical services.

Problem: Insurer has no incentive on Employer-Cost-Plus to reduce costs

Self Insured or Cost-Plus Employers getting Screwed would be BEST SHOPPERS if enabled!

  1. For the biggest (like Amazon, Walmart, GM) - It is important for them to control costs - long ago GM said health care costs more than all the steel in each car.

  2. Other Midcap employers even with thousands of employees find it very hard to control health-care costs. For most of them they have multiple locations and HAVE to provide coverage on a nation-wide basis, and only choice they have for that is at most 3-5 suppliers.

So, having actual price information can give self-insured employers and health insurers a stronger hand in negotiations, so they could demand better deals from hospitals. But it could also spur some hospitals to raise their prices if they think competitors are getting a better deal from insurers.

More price information can help lower prices, especially if employers and insurers use it to demand steeper discounts. "This money is coming out of employers' pockets," he says. "They're going to say, why, if Hospital B can do this for $300, why are you charging me $600? Justify your charge." .. While that won't work in areas with a strong hospital monopoly, it's a start, Nation says. "You can't have price competition without knowing the price. And that's where we have been living." -- George Nation

Provider Control: CPT Codes are "secret"

  • PKJ Had experience where the EOB (insurer determination on claim) were very opaque pushing provider charges onto patient "high deductibles" - basically they just don't care - let doctor screw you and nickel and dime you!

Secrecy is key behind Health care costs - Internet pushes down prices

"We've never had price transparency, so there is no evidence to point to exactly what it would do," - Gustafsson

  • In contrast in online retail, having price information from shopping websites like Amazon has helped drive prices down.

Provider Control : Negotiated Prices are Trade Secrets

They've long opposed efforts to reveal their negotiated prices, which they say are trade secrets. The Trump plan will backfire, America's Health Insurance Plans predicted: "Posting privately negotiated rates will make it harder to bargain for lower rates, creating a floor — not a ceiling — for the prices that hospitals would be willing to accept."

Strong opposition by Providers and Insurers, Lobbyists and Associations

Hospitals and insurers, have made it clear they plan to fight the CMS proposal for data and pricing transparency— all the way to court if necessary. Proposal will have to be drafted into law It could be modified after the administration reviews public comments, which are due Sept. 27. And after it's finalized as a regulation there may well be a legal battle. In current legislative sessions, it is unclear if it can clear both houses

Provider Control using Lobbyists and Associations

  • American Hospital Association, which said the proposal "misses the mark, exceeds the administration's legal authority and should be abandoned."

Why Shopping and Price Transparency

Activists and Studies say Transparency would curb rising costs

There are growing calls from consumer advocates, who argue transparency can help tackle rising health care costs.

  • Lovisa Gustafsson, assistant vice president at the Commonwealth Fund.
  • Zach Brown, an assistant professor of economics at the University of Michigan.
  • Business professor George Nation, studies hospital pricing at Lehigh University

Individual Costs Rising but not able to Shop

2019 Trump proposal: force Hospital Rules

End July 2019Trump's CMS proposed new rules that would provide consumers far more detail about the actual prices hospitals charge insurers. But the plan also has the potential to overwhelm patients with data.

Under the proposal, hospitals would be required to post the prices they negotiate with every insurer for just about every service, drug and supply they provide to patients, starting Jan. 1, 2020.

Transparency Implementation Issues and Blocks

Problem 2: Huge Data price-lists - Thousands of Little Services and Supplies

Although the proposal requires the information be presented so it can be searched online, it will be a huge dataset.

Each hospital has tens of thousands of charges, from room fees to suture costs to the price of each tablet of aspirin. Then multiply that by the number of insurers that contract with each hospital. Each service has a separate contract with each insurer. The total amount of data could be staggering.

Patients would need to know what tests, procedures, supplies and even drugs they might need for a given hospitalization, then add them up — for every hospital they are considering.

CMS Solution 2: 300+ Service Bundles - with typical End-to-End price-sets

To help consumers, the CMS proposal would also require hospitals to provide information on 300 "shoppable services" — say a knee replacement — and include the price of all the related services that go with it, rather than expecting patients to somehow try to add them up a la carte.

Little Consumer Usage of Large Databases

Benefit: Those who Shop for Health Care get Significant savings

Still, when price data is available, some patients — particularly those with high deductibles that haven't been met — will shop and choose a lower priced provider.

There is experience on consumer behavior in New Hampshire, which posts price information by insurer online. 1. Only a small percentage took advantage of the online look-up tool 2. Those who did saved money, - SRC: a recent study by Zach Brown, an assistant professor of economics at the University of Michigan.

Problems in Shopping: Concentration, No choice

  1. There may be only one hospital in town

Problem: Existing Relationships

  1. Patients might be reluctant to switch if they have a relationship with a specific hospital.

Problem: Patients taken to "Preferred" Hospital - referral fees or , Pushing to specific Providers

Problem: ER little time - Patients taken to "Preferred" Hospital - referral fees or , Pushing to specific Providers

  • When you are taken by an ambulance, there is no time

Problem: Lack of Health Advocacy to help Patient/Families shop and navigate - Like a "Court"


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