New column: price tags for health care

An excellent article, thanks. Hopefully your earlier posts (here / swampland) + Kate Pickert’s helped. More pricing transparency is needed, but often this alone doesn’t work, such as a sudden emergency. The cheapest Lasik or cosmetic surgery option is likely bad too, so kudos for bringing up price / quality comparisons. Your quote “(at some point, “cheap” signals low quality)” should be bold text, NOT parentheses! Maybe quality-driven HC vs. quantity (too many tests, pills) is the real solution, from which price / quality transparency will work. And where there’s time to price shop, use written estimates sim. to car repair and home construction. Do you have more thoughts or examples for us? Thanks for your posts, Barbara.

I hope price tag isn’t a joke, because I don’t get it.

http://docstoc.com/docs/33795306

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“[...]price transparency as a way to keep down health-care costs only works if consumers have alternatives.”

LASIK may not be the best example. It’s a fairly standardized procedure. When you deal with the myriad cancers, heart problems, auto-immune diseases, hormonal problems et al, it’s difficult for anyone to evaluate a cost/quality relationship, and especially difficult for someone not sophisticated in medical treatments, i.e 99% of us.

Would you be able to say, “I know Dr. A has a 75% chance of saving my life, but though Dr. B has only a 65% chance, he is 30% cheaper, so I’ll go to Dr. B?

If some patients indeed are able to select doctors on the basis of quality/price, the best doctors would being taken by the wealthiest people (who will demand the best, no matter the cost), while the lesser doctors are left with the poor.

Come to think of it, it’s already begun, with many of our best doctors opting out of Medicare.

Be careful what you wish for.

Rodger Malcolm Mitchell

It’s unfortunate that the final piece didn’t reflect that fact that you needed to stop and ask if a repeat xray was necessary. Will patients really do that? I doubt it.

Transparency pricing alone won’t solve or slow health care costs. Consumer driven healthcare, despite the promise will fail as well (look at how 401ks have helped the American public in planning for retirement!).

Note that proponents always point to the example of how LASIK eye surgeries have gotten less expensive because of price transparency and increased competition as more eye doctors enter the market in what used to be a very expensive procedure.

But that is always the only example that they give.

They fail to demonstrate how price transparency alone results in decreased costs. Look at elective plastic surgery, which like the LASIK example, has doctors providing a service which isn’t medically necessary. Shop around. Get pricing. Has plastic surgery gotten less expensive like LASIK surgery? Of course not. Why?

Can Price Shopping Improve Health Care? Do Pigs Fly? http://bit.ly/9gZbsw

–
Davis Liu, MD
Author of Stay Healthy, Live Longer, Spend Wisely: Making Intelligent Choices in America’s Healthcare System
Website: http://www.davisliumd.com
Blog: http://www.davisliumd.blogspot.com
Twitter: davisliumd

Finally, someone who gets it! Thank you for actually getting this article in print. I’ve been on this soap box for over a decade.

The other dragon we would need to slay to actually make ‘open market’ healthcare a reality is the medical insurance beast.

It’s not just that most doctors won’t tell you what a given procedure cost, most doctors can’t tell you and don’t even understand the question. Their cost has absolutely nothing to do with what the payer (the medical insurance companies) will pay them, so their cost of service is a meaningless concept.

The AMA has had a cost of procedure scale for every procedure any doctor can perform (over 10,000) and has been maintaining this scale for over 20 years now. This scale is called RBRVS. But Medicare is the only payer required by law to pay on this scale and, therefore, is the only payer doing so. Most doctors think of this scale as the government’s system and don’t realize it actually belongs to the AMA.

Until state insurance commissions require all payers to pay on this scale, we will never be able to really understand the cost of providing healthcare.

The whole argument for “healthcare reform” hasn’t been about getting control of the cost of providing medical services, but on expanding medical insurance — not the same thing!

The “conservative lie” (one of them) is that “liberals want the government to do everything.”

Another “conservative lie” is that we have an open economy where “free market economics” actually applies.

(And while I am at it, “libertarians lie” because they fail to realize that even if you CAN do something, it doesn’t remove your responsibility for the consequences.)

The truth in regards to medical care is that we do NOT have a “free market economy” because of the self-licensing of the medical profession. I quit pharmacy school 40 years ago, not because of the challenge of dealing with the multiplicity of medicines, but because my advisor explained that the requirement for two years of calculus (I was getting A’s) was to keep DOWN the number of graduates and keep UP the wages of licensed pharmacists.

Pharmacists are now highly paid “shoe clerks” and doctors are highly paid “plumbers” but as long as THEY control their membership, the supply will always be less than the demand so that their income is protected. That is also why the medical profession has the belief that the more expensive the drug and the procedure, the “better” it is for the patient regardless of the outcome or actual benefit. Our medical profession IS the problem when it comes to increasing medical expenses.

The example of Lasik surgery, however, has little to do with any solution. Lasik surgery is NOT a medical necessity but is rather a cosmetic procedure (whose benefits usually end 10 years afterwards as most patients resume the need for glasses). The procedure is also a commodity, rather than a specialized process which is why there is (some, but not much) price sensitivity. The competition as to prices is mostly because the need for the Lasik procedure is NOT essential and doctors use price to give them some differentiation as they try to sell the still expensive process to patients.

When you have a “regulated industry” such as medicine, the need for government is to keep the regulators from stacking the rules in their favor. Mis-regulated government is as much a tyranny as over-regulated or under-regulated government.

jymallyn,

In all of the lengthy health care debate, finally someone points to the real problem! The problem with health care is the high priced uncompetitive supply system. For starters, the AMA was formed in the late 1800′s for the purpose of increasing doctors’ earnings by restricting competition. That was the inducement to doctors to join, but that was not what the organization sold to legislatures of the individual states. Health care and health insurance are mostly uncompetitive because of the state regulation. The cost of development of new drugs is mostly a problem of the federal government–the FDA.

Two things are needed:
1) The federal government should sponsor new national medical associations for doctors and nurses that must be recognized by all of the states.
2) The states must sponsor new FDA type regulators that are allowed to compete with the FDA.

We should break up the medical monopolies just like AT&T was broken up in the ’80′s.

Why is the cost of health care procedures and treatments so mysterious? How come I don’t know the cost of a test or an office visit? This fun video makes you wonder:
http://www.whatstherealcost.org/45secondstoshare