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Sunday, August 14, 2011
Law - "Why hospital bills remain a big mystery: A dense thicket of medical, insurance variables makes it difficult to get a cost estimate for a surgery or procedure"
The ILB posted August 2nd on an upcoming oral argument on hospital charges for uninsured patients. The argument took place before the Court of Appeals on August 3rd; you can watch the video here.
Although not exactly on point, I was reminded of the case today when I saw this long story by Thomas B. Langhorne in the Evansville Courier & Press on the difficulties of finding out and comparing health care costs. Here is just a sample from the story:
State law does not require hospitals and insurers to disclose the varying prices they negotiate with each other. Representatives of Evansville's two major hospital systems said those contracts typically require that prices remain confidential, a feature each said is requested by insurers."And why do they? Do you think that Walmart pays Proctor & Gamble the same price when they buy the soap to put on their shelf that Target pays?" said Tim Flesch, president and CEO of St. Mary's Health System.
"Do they pay the same price as Kroger or any of the other people who offer that same product? I'd hazard a guess that no. Can Kroger go to any website and see what Walmart buys, what Walmart pays? No. And why? Because it's confidential," Flesch said.
"Why wouldn't Walmart tell you what they're buying the soap for? Because they'd be disclosing their price to everybody else, to all their competitors."
That kind of transparency in health care pricing — down to the last penny, no exceptions — is exactly what former U.S. Rep. Steve Kagen, D-Wis., said is needed to establish a competitive medical marketplace.
Kagen, an allergy and asthma specialist whose family has spent seven generations in medicine, unsuccessfully pushed legislation in Congress last year to require that all health care providers and insurers disclose all prices for products, services and procedures. The prices negotiated between providers and insurers, and the differences between price quotes and settlement amounts, would be revealed on the Internet.
Only then, Kagen said, could consumers shop for health care services as they do in large, diverse segments of the economy where transparent pricing is the norm.
"The problem we have in health care is that the prices are opaque. There is no competition among insurance companies, hospitals, doctors on quality, price and service. In anything else in our country, when you're in business, you're competing on the basis of the quality of your product or service and its price," he said.
Posted by Marcia Oddi on August 14, 2011 12:06 PM
Posted to General Law Related