The Wall Street Journal reported in a June 13th article,
Page D1 that several major insurers (Aetna, Cigna, Humana, UnitedHealth)
as well as Medicare are disclosing the prices they have negotiated with doctors
and hospitals for a number of common procedures. Some are beginning to include
quality indicators with the pricing information. This is an apparently-growing
trend that may spell doom for companies like HealthGrades,
but this wasn’t noted in the article. One interesting thing: apparently at least
a few insured people have used the system, even though they’ll be well past
the deductible. Maybe some few will note a link between the premiums they pay and the Medical Loss Ratio their insurer experiences. On the other hand, the
article notes that in the absence of any other quality indicator, people may
think that more expensive implies higher quality and choose the
The insurer’s tools are restricted to their own plan members: this means if
you’re covered through Cigna you can’t tell what out-of-pocket costs might be
for somebody covered by (say) United. The article goes on to detail several
of the limitations inherent in these disclosures, well-known to readers of The
Healthcare Blog. Tools like these might actually be useful to those with HDHP
coverage, or the uninsured.
But there’s more. The article says states are beginning to mandate that hospitals
disclose their charges. Charges amount to the "list price" that almost
nobody pays, so this isn’t very helpful to prospective patients. The list includes
South Dakota, Minnesota, and Florida. I wonder who got the states to mandate
that instead of something useful. Some state hospital associations are evidently
taking proactive measures, and have created their own websites to disclose hospital
charges before being told they must. But why would they do this?
Look at this from the New Hampshire Hospital
Association PricePoint system:
How much do government programs pay compared to other payment
In many cases, Medicare & Medicaid reimburse hospitals at rates that do not
cover the costs they incur to provide care. Payments from privately insured
patients generally subsidize the shortfalls created by Medicare and Medicaid
and therefore represent a “hidden tax” on individuals and families not
covered by government programs.
When you ask for prices, you get median and mean charges with no promise that
your bill will bear any resemblance to either figure, and this editorial.
Apparently, they expect they’ll be forced to disclose someday, and this way
they can control the content of the disclosure. If the legislature gets involved
the hospitals might not be allowed to put their own "spin" on things. This actually
is brilliant strategy. They’re not disclosing very much, but they can claim
they’re being as transparent as they can be, given the vagaries of medical treatment.
They can lobby commercially-insured patients to lobby congress to increase Medicare
reimbursements with an implication that the amount they pay in "hidden taxes"
will go down. But of course it won’t. They do not mention that there are many
cases for which Medicare & Medicaid reimburse hospitals at rates that exceed
the costs they incur to provide care. Imagine! Finally, they offer no assurances
that the costs they incur to provide care are reasonable.