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?