Healthcare Partners, the biggest physician group to emerge from the carnage of Southern California physician group implosion in the late 1990s is now putting a list price out for some procedures. Why?
"It feels like the right thing to do," said Robert Margolis, a founding physician and chief executive of the medical group.
OK This is a little curious, and that explanation won’t win Bob too many prizes in his MBA or logic class but given that he kept his ship afloat while the rest of southern California’s physician groups imploded, it’s not wise to think he’s crazy. So what’s going on? This is perhaps a preemptive strike on the retail store clinics, which are not yet big in California. It’s also perhaps a play for the dollars of the worried-well uninsured. So there may be logic behind it if it’s really an attempt to grab market share.
But there’s probably less to it than that. If you look at the actual prices, the only ones quoted are for wellness visits, immunizations and physicals—the kinds of things that are often not covered by insurance and usually aren’t that big a part of a physician’s revenue. Furthermore the price bands are very, very broad. An office visit for a repeat customer is $55 to $170. Well $55 may undercut a retail clinic but $170 won’t. So how is the consumer supposed to make a buying choice between them? And of course the prices are not anything like as detailed as say what Aetna’s releasing in certain markets. This leads me to believe that they’re way above the rates that HealthCare Partners has contracted with the local health plans.
So at best this is a tentative step in the water. And the best evidence from that comes from Margolis himself. He’s veteran of the global capitation days and he knows that this front end stuff doesn’t matter much in the big picture.
Many healthcare professionals, including HealthCare Partners’ Margolis, believe that consumerism has its limitations and is no cure-all for escalating healthcare costs. That’s because the biggest cost drivers are the chronically ill, who are often unable to comparison shop and quickly reach even the highest commercial deductibles every year, or are so impoverished by medical expenses that they are on government programs. Consumerism "has a nice ring to it," Margolis said. "But it’s very shallow in its effect, in my view."
There is of course a way of creating price competition that helps consumers decide what health care services they should be buying, and will actually create a rational market in health care. But it ain’t at the individual service level, and to get there will of course mean running roughshod over all the ideals that the wackier promoters of consumer transparency espouse. But more of that another time….
CODA: And for your amusement…NPR’s Marketplace called me for a rent-a-quote about this story but I went to walk the dog, and in the meanwhile they secured some other pundit. Someone else gets their name in lights and I’m left picking up dog poop. Fame is fleeting, eh?
Posted by: Eric Novack
“once all rates are truly transparent, a remarkable thing will happen:
Doctors no longer need to be a part of insurance plans. They can just publish their own rates, eliminate much of their billing staff.”
Docs can do that now Eric, what’s stopping you?
“And the total cost of healthcare would decrease.”
Because provider reimbursements will be lower?
I am leaving the previous spam comment up because I cannot figure out what it’s getting at
It’s no longer surprising what people are willing to do for the sake of fame and glory. Their main purpose may not be obvious, but it will surely be revealed sooner or later.
you mean I have to rpoofread my stuff now? You lot are so demanding
Just thought I would mention that the Northern and Southern CA Permanente Medical Groups are the largest private physician groups in CA by a very large margin. I laughed out loud when the LA times opening sentence overlooked this point.
It would be nice to know the “prices” of common lab test also. Most physician visits generate at least two or three lab tests. So how much does it cost to “tinkle in the cup”?
Matthew: Thanks for picking up your dog’s poo.
Does this sentence need proofreading? It doesn’t make sense: “And of course the prices are anything like as detailed as say what Aetna’s releasing in certain markets. ”
Many physicians have recoiled against the idea of insurance companies publishing contracted rates for services.
As I believe I stated at THCB previously, once all rates are truly transparent, a remarkable thing will happen:
Doctors no longer need to be a part of insurance plans. They can just publish their own rates, eliminate much of their billing staff, and go simply assist patients in filing claims when the dollars amount is high enough to warrant it.
And the total cost of healthcare would decrease.
They probably have a plan in doing this. It may not be what they are doing, but it’s obvious that there is a reason behind this action.