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THE MEDICAL JOURNAL

Give me two 'Medicare specials' and a side of surgery
By LEE BOWMAN
Scripps Howard News Service

 

August 23, 2006
Wednesday


Americans are increasingly being asked to consider how much health care is worth to them.

Not to be confused with health itself - which is priceless - politicians, employers and even some insurers are attempting to make the pricing of medical care "transparent" to consumers.

The idea - bolstered by a growing amount of quality-data and consumer-satisfaction surveys - is to encourage patients to make more informed decisions about their care.

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In an executive order issued Wednesday (Aug. 23), President Bush directed the four major federal agencies that oversee health plans for government workers, the military, veterans, the disabled and elderly to compile information about the quality and price of care, and share it with the public.

Although health-care spending accounts for more than 16 percent of the national economy (and that's expected to rise to 20 percent or more in the next decade), few people know how much a medical encounter will cost when they walk in the door.

Even fewer shop around for bargains.

"Americans are all about being cost-conscious. People deserve to know what their health care costs, how good it is and the choices available to them," said Health and Human Services Secretary Mike Leavitt, who will oversee the new government initiative.

Considering that the federal agencies provide coverage to nearly one in four Americans with health insurance and pay for nearly 40 percent of all health care, the effort will presumably carry clout.

"It will fuel a substantial amount of change in the way health care is ultimately purchased, but it will take time for that to unfold," Leavitt said.

But even so, shopping for medical care may never be quite the same as flipping through the newspaper's grocery inserts for good buys or surfing Web sites for bargain airfares.

Do you shop for quality or price? The health industry has been working on quality and outcome measures for years. And the increasing use of electronic records and computers to track care should make it easier to know which treatment approach works best and which providers have more success treating a disease or doing a procedure.

But it's hard to imagine in the foreseeable future most heart patients demanding treatment with drugs over an angioplasty for a blocked artery based on cost, or even with a laptop full of evidence that one type of care is superior to another.

If the "average" price for a hip replacement is $50,000, is getting the job done for $35,000 a steal? For most people, feeling confident about the treatment and being assured of a reasonably good outcome is more important.

Surveys suggest that only about 15 percent of patients do any research on quality or pricing for health services.

Although the landscape is changing, most Americans still have their health care paid for by a third-party insurer. Their economic decisions about health care remain confined to deciding which health plan to choose, if they get any choice at all.

"Gone are the days when a doctor posts fees and patients pay the doctor directly," said Dr. Edward Langston, a family doctor in Lafayette, Ind., who sits on the board of the American Medical Association. "If we want patients to become more prudent purchasers of health care, they need to be in greater control of their own health-insurance choices and need price transparency from all insurers, not just the federal government."

The truth is, what an insurer says it pays for a procedure and what a hospital says it costs seldom match. Insurance companies negotiate discounts in exchange for volume to providers; the providers make up the difference by charging more to someone else or for something else. Most of the published price information comes from public insurance programs like Medicare or averages of what private insurers pay.

Advocates for the uninsured have long complained - and in some instances sued - because providers have charged individual patients fees well above the markdowns those with health insurance get.

Bush and many business leaders expect that changes like health savings accounts or flat payments to workers for health coverage will make consumers more price-conscious over time. That's a major reason behind the move to put out more quality and price information.

But that doesn't mean everyone will be able to ask for the "Medicare special" at a local hospital or clinic anytime soon.

 

Contact Lee Bowman at BowmanL(at)SHNS.com
Distributed to subscribers for publication by
Scripps Howard News Service, http://www.shns.com

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