It Cost What? Crowdsourcing Costs In An Evolving Healthcare System

flying cadeuciiCrowdsourcing is engaging a lot of news organizations today. While some journalists are nervous about crowdsourcing — “Yikes, we’d rather talk than listen, and what if they tell us something we don’t want to hear? Or something that we know isn’t true?” — we here at clearhealthcosts.com love crowdsourcing. We find, as journalists, that our communities are smart, energized, truthful and engaged, and happy to join hands in thinking, reporting and helping us make something that’s bigger than the sum of its parts. We learn great things by listening, so … now we’re going to to an experiment crowdsourcing coverage for our blog.

Our current project crowdsourcing health care prices in California, with KQED public radio in San Francisco and KPCC/Southern California public radio in Los Angeles, has been a great success, as was our previous project with WNYC public radio, and we’re looking forward to launching similar projects with other partners.

Our community members have a lot to say. Some of what they say about health care prices we knew (people are upset, and they feel like they’re paying too much, and they have a hard time understanding their bills) — but some of what they say is totally radical: They’re out there negotiating over prices regularly. They’re putting away their insurance cards, choosing to pay cash and saving hundreds and hundreds of dollars.

They want to show us their bills. They want to talk about it.

1. Almost overnight, we have seen an explosion in the number of doctors contacting us to offer support of pricing transparency. Our theory: most docs got into this profession to help people, and they’re appalled by the epidemic of money medicine, and by the simple fact that their treatment decisions are increasingly governed by money — what the insurance company will pay, what the patient can afford, what’s on the formulary. Yes,  there are some bad apples in the bunch. But that is the exception, not the rule. (Hospital bills, on the other hand, are full of errors and overcharges.)

2. There’s a similar explosion in the number of people who want to  talk about “all on Medicare.” The idea of single-payer is still unpalatable to much of the nation, and the term “single-payer” has itself been tainted in the political discourse. But we are hearing from people on the left and the right and in the middle who are saying variations of this: “All on Medicare” to us means something like “Enough is enough. Single payer is the way to go.”

3. The shocking rise in generic drug prices: what happened, and will the congressional investigation that Bernie Sanders is mounting have any effect? Nearly 70 percent of Americans use some prescription drugs, and the skyrocketing prices affect millions of people. Should we blame it all on Big Pharma? What about pharmacy benefit managers?

4. Mergers and acquisitions in health care hit an all-time high. Lists of providers with office addresses, phone numbers and billing contacts are out of date before they are even printed, let alone posted on the web. Will we wind up with one big hospital health care system, named Blue Partners Aetna Cigna Cedars Mayo Cleveland Optum Sutter HCA Tenet Continuum? And how will that differ from “all on Medicare” or single-payer or whatever you want to call it? Oh, right: Blue Partners Aetna Cigna etc. will be a for-profit, with an eye on Wall Street.

5. People are paying cash for health care, as they increasingly realize that putting away their insurance card is good under certain circumstances. A $4 generic at a big-box store rather than a $15 co-pay for a generic under their insurance plan? A $580 charge for a cash MRI rather than an $1850 charge under their insurance plan because they haven’t met their deductible? We may be seeing the beginning of the end of employer-sponsored high-premium insurance. And wait until the Cadillac tax hits fully in 2018; people are already positioning themselves for that, and it’s looking ugly for those who want to preserve a system in which employees pay no premiums and no co-pays or co-insurance or deductibles.

6. Price transparency is huge. Those who embrace it will be rewarded, and laggards may be punished. You may have a great insurance plan, few health problems and low out of pockets. But you’re an exception, rather than the rule. Listen to our community members:

“Thanks for what you’re doing to make healthcare reasonable and fraud-free!”

“From Rapid City South Dakota. I think your effort to establish a list of prices for various medical procedures is great. ”

“I just want to say that your website is amazing. Please don’t stop because you are helping people everyday, many of whom are struggling to make ends meet while others are just looking for a some transparency in a market where there has traditionally been very little.”

7. Insurance plan design is totally not sexy, but it is  the next big frontier. Narrow networks? What does your plan allow, and what does it prohibit? Can you get the kind of insulin you need under your plan’s formulary, or are you only covered for insulin you’re allergic to? Do you have to travel 300 miles for behavioral health coverage? Did your insurance deny treatment that made your illness, injury or condition worse?

8. Medicaid expansion reduces everybody’s private premiums in states where it’s been embraced. This makes sense, but who thought about it in this way? It will be interesting to see how many more states decide to refuse Medicaid expansion, and how many embrace it.

9. Healthcare.gov will not work perfectly during open enrollment. Neither will the states’ individual exchanges. We will probably hear a lot about this, and we’ll probably have to write about it, but this is a sideshow, and the complaints about failed software should be remarked upon and then ignored. Software doesn’t always work; we happen to know. The administration is trying to fix it, but it’s still complicated.

10. Patient engagement is indeed the blockbuster drug. Yes, it’s hard; yes, it’s often unreimbursed. Yes, it can go awry. But it is the future of medicine: let me introduce you to patients and providers joining hands to make a better future: e-Patient Dave deBronkart, Casey Quinlan, Danny Sands, Leslie Kernisan, Gilles Frydman, the Society for Participatory Medicine, and the people at the heart of the Patient-family Engagement Roadmap, prepared by the American Institutes for Research under a grant from the Gordon and Betty Moore Foundation. Even the Institute of Medicine has weighed in on shared decision-making.

11. I am not planning to write about this, but I add it here for the sake of adding it: The ACA didn’t totally fail. The ACA didn’t totally succeed.

So that’s a start on what we’re thinking about. What do you want us to cover?

Tell us your thoughts, either in the comments, by Twitter @chcosts, or by email to info (at) clearhealthcosts (dot) com.

With such  success in those two projects, we decided to try crowdsourcing our coverage: what health cost topics should we cover? We’re looking back  and looking forward — and we’re coming to you, our community, to help guide us. Here are some subjects we plan to write about.

Our ask for you: Please tell us what surprises you. What you want us to cover?

Let us know, in the comments, by Twitter @chcosts, or by email to info (at) clearhealthcosts (dot) com. Or by snailmail to P.O. Box 8124, Pelham, N.Y. 10803. Or by Pony Express…




16 replies »

  1. I really like your point 5 “People are paying cash for health care as they increasingly realize that putting away their insurance card is good under certain circumstances” By paying cash in general, we still get a good idea of what we really pay and what it is really worth….

  2. Very well written article on health care system..here i’m suggesting that you should track average claim payment times and variety of rejections and appeals required for payment

  3. Nice one, Barry!

    First, We heard today about yet another hospital that is leaving contract negotiations with an insurer. As we hear it (from the employer/patient side) the hospital and the insurer are not able to reach terms, so the contract ends — and the hospital will no longer treat insured people at the contracted or negotiated rate, sadly in the middle of the year. Is this common? Anyone?

    Second, it seems that it should be relatively easy, for standard procedures, for a hospital to make a binding estimate, as you suggest–let’s say for an MRI, a mammogram, ear tubes, tonsillectomy, stuff like that. Hospitals? Can this be done? and how well is the MA pricing law working? We have heard mixed things ….Our early blog post is here:


    Enlighten us!

  4. I would continue to pound away at the hospitals. Specifically, how do they price, bill and try to collect for care that must be delivered under emergency conditions from patients who are either uninsured or found themselves treated by an out-of-network provider? I understand that New York recently passed the toughest law in the country to deal with this issue but it doesn’t take effect until March 2015. Hopefully, other states will follow NY’s lead.

    The second issue is why won’t hospitals provide patients with a BINDING estimate of their out-of-pocket costs for care that can be scheduled in advance? This shouldn’t be all that hard and, if there is a risk of complications that could lead to higher costs, hospitals should be able to take on that risk and factor it into their pricing models. I think MA has a new law that requires this which took effect on 10/1/2014. Other states should follow MA with a similar rule or law.

    As I’ve said many times, when hospitals aren’t killing us with infections, they’re killing us financially. I would like to know whether providers or insurers are pushing harder to sustain the confidentiality agreements that preclude the disclosure of actual contract reimbursement rates or are both sides resisting changing the status quo with roughly equal vigor? Price and quality transparency are absolutely critical if we expect patients and referring doctors to make healthcare and provider choices based on quality and cost.

  5. Nice. By this, one would think, there is an advantage to people delaying claims to take advantage of the float, which would be /could be HUGE $$. But don’t the contracts often have a mandated time of payment — e.g. payment must be made in 30 days from date of service, with no-audit clauses?

  6. So if applying the cash rate is against plan rules, I assume the plan has the final say on applying cash payments to the deductible.
    Don Levit

  7. Mike, not unless consumers can separate campaign donations from politicians.

    In the 60 minutes story the drug company reduced the wholesale price (to docs) by charging same full price then giving rebate to docs. That kept the retail the same.


  8. Here’s another: you should track average claim payment times and number of rejections / appeals needed for payment ..

    Not sure how you do this exactly — but a system where consumers could report progress would certainly be a step in the right direction

  9. “60 Minutes” show Oct 5th would be good watch for your Crowdsourcing efforts in transparency.


    Two docs were interviewed (the good guys) who had the drug taken off their systems formulary – temporarily. Many docs make 6% on retail price of drugs so prescribing the most expensive is profitable, and Medicare can’t negotiate a lower price. One of the drugs featured was $11,000 which gave about 42 days of life.

  10. We have understood this to be part of the plan design: if you sign up with BCBS, for example, you agree to their rates, depending on the contract, as we have been told.

    In some plans, BCBS gives you the negotiated rate at all times (perhaps with a $20 copay), and in some you must pay the sticker price until you reach your deductible. In still others, you pay 10 percent or 20 percent of the price (sticker or negotiated, depending on plan).

    But if you’re paying a cash rate that’s lower than the sticker price, then applying it to your deductible is against plan rules, we have been told.

    That is our understanding. Others?

  11. When participants pay cash instead of submitting bills thru their insurer I understand the cash payment typically does not go toward fulfilling their deductible
    Is this an insurance law or primarily a traditional insurer practice ?
    Don Levit

  12. Good questions, Jeanne.

    Here’s one idea I kinda like:

    I’d like to see a “Send us your billl” feature where people can post their bills online to be reviewed for discrepancies and potential irregularities: with some posted online for public comment – THCB could even get involved in something like that. Maybe. Social shaming could end up doing the trick …