Reveal health care costs
USA TODAY
Editorial
August 30, 2006
Traditional insurance, whether government- or employer-based, shields patients from the true costs of care. If someone else is paying most of the bill, patients have little incentive or ability to demand lower prices. Hospitals and doctors face little pressure to publicize their fees or to lower them.
Faced with rising costs, however, employers are pushing workers to shoulder a larger share with higher premiums, deductibles and co-pays. Plans combining low premiums, high deductibles and employee-funded health savings accounts are gaining popularity. Because those plans force people to spend more of their own money, they have more incentive to shop around. But they can’t do that without better data.
The medical industry has paid lip service to transparency but has been slow to act. Allen Hubbard, director of President Bush’s National Economic Council, warned hospital executives in March that the administration would urge Congress to require better disclosure unless voluntary efforts start soon.
Opposing view
Transparency or fig leaf?
By Steffie Woolhandler and David Himmelstein
Nearly 47 million Americans are uninsured, and millions more have coverage so skimpy that a major illness would bankrupt them. Yet President Bush apparently thinks Americans are too well-insured.
He’s pushing health savings accounts – a plan to make the sick pay thousands from their own pockets before insurance kicks in. And the fig leaf for his soak-the-sick scheme is “transparency.” Just make hospitals and doctors post their prices, he says, and the market will magically cut health costs.
The president’s scheme will drive millions more into medical poverty, but it won’t hold down costs.
Insured Americans already pay bigger co-payments and deductibles than do people in any other nation. Yet our health costs are far higher than anywhere else.
Steep out-of-pocket costs have little impact on overall spending. They discourage preventive care such as immunizations but don’t affect the real cost driver – expensive illnesses that afflict only 20% of Americans each year but account for 80% of spending.
Huge corporations like General Motors have tried for years to hold down health benefit costs by using their market muscle (and the kind of price and quality information Bush touts). They’ve failed. If GM can’t bargain down costs, will Mrs. Smith succeed?
Transparency won’t cut costs, but national health insurance would. A single-payer system could save $300 billion annually on health bureaucracy…
USA TODAY view:
http://www.usatoday.com/news/opinion/2006-08-29-medical-costs_x.htm
Opposing view:
http://www.usatoday.com/news/opinion/2006-08-29-medical-costs-oppose_x.htm
Comment:
By Don McCanne, MD
All too often in the debate on reform we see advocates lead with policy solutions and extrapolate backwards to the problem that is being addressed. The debate over price transparency certainly exemplifies this.
The solution is to have patients bear more of the costs of health care. The obvious problem solved is that we can reduce health care spending by making access to care truly unaffordable. But no, the backward argument is that we can make patients more thrifty shoppers by making them reach into their own pockets.
Insurance innovations have already evolved to the point that patients are exposed to costs, yet spending remains out of control. That leads to the next backwards extrapolation: patients who are responsible for most of the spending are accepting too much care because they are not presented in advance with a full itemization of the prices and fees that they will face in the care of their complex acute and chronic medical problems. The problem is so straightforward that Allen Hubbard is going to sic Congress on the providers if they don’t start to provide in advance the reams of itemized charges that the patient will face. It doesn’t matter that such lists are impossible to provide since health care is a dynamic process, and it is impossible to know which diagnostic and treatment decisions will be made along the way.
The problem is not the lack of price transparency. Americans are already very concerned about the affordability of health care. Patients are not jockeying for the right to be the price negotiator for their own care; they understand that they are impotent purchasers in the health care marketplace.
They want something done about the true drivers of health care costs. What they still don’t realize is that they want to be part of a public monopsony that can negotiate health care value for them: a single payer program of national health insurance.