Friday, February 1, 2019

Healthcare Price Transparency

This week, I was made aware of the need to make prices more visible to patients. I received a letter from the Maryland Insurance Commissioner, Al Redmer, because a GBMC patient was stunned when he received a bill for more than $5,000 for a leg compression device to prevent blood clots. His insurance had paid $3,000, but since the durable medical equipment company was “non-participating,” he was left with a $2,000 responsibility. “Non-participating” means that the durable medical equipment company had not contracted with the insurer and reserved the right to charge anything the insurance company didn’t cover directly to the patient. Evidently, we had ordered this device without investigating how much it cost or how much the patient would have to pay out of pocket. I am sure that whoever ordered the equipment did so in good faith, trying to help the man. Mr. Redmer had also sent a letter to the president of the man’s insurance company requesting an explanation.

On Tuesday, I heard a speech from the Administrator of the Centers for Medicare and Medicaid Services, Seema Verma, who discussed how she and the Secretary of Health and Human Services, Alex Azar, were focused on driving healthcare costs down. She highlighted that, as of January 1, 2019, all Medicare participating hospitals were required to publish their chargemasters online to make prices available to patients. GBMC has dutifully done this. If you want to view the GBMC charge master link, click here. I would recommend that you visit other hospital websites and see if you can compare their prices. This will be challenging due to the variation in cost for procedures, so you may want to compare something like a Mumps Measles and Rubella vaccine. With some research, you will be able to find this because it is a vaccine that does not vary across hospitals making it an apple-to-apple comparison.

As in the case of the man referred to in the letter from Commissioner Redmer, the charges by themselves are not enough for a consumer to know what they will pay out of pocket because it will vary dramatically according to the insurance plan. For example, GBMC employees who have taken our platinum plan don’t pay anything out of pocket, no matter what the charge is, if they use GBMC. This is obviously not true for someone with a “high deductible” plan. (By the way, this is a reason why many think we should explore a single-payer plan, to simplify the rules and to spend much less on insurance administration. It would be as if everyone had Medicare and there was only one set of rules. The Canadians have a single-payer system and they save a lot on administration and spend 40% less per capita on healthcare with much the same outcomes as ours).

Maryland is the only state in the U.S. where hospital rates are set by a commission known as the Health Services Cost Review Commission (HSCRC). All payers pay the same price for a given service in Maryland. In the other states, hospitals set their prices very high on their chargemasters to be able to negotiate downward with Blue Cross and other insurers. The gap between what the chargemaster says and what individual insurers actually pay is not as big in Maryland as it is in the other 49 states. In all states, however, the person with no insurance is billed the full charge as found on the chargemaster. People who cannot pay these charges apply for discounts based on their means.
GBMC has some of the lowest hospital charges in the region and with our global budget and more patients coming, our prices have actually gone down. Making patients and employers (who could steer their employees towards high-value hospitals) aware of price differentials is a good start, but we all have so much more work to do to build a more value-driven healthcare system. If you want to know more, please visit a recent New York Times article on hospital prices here.

I would like to thank everyone who recently took time out of their busy schedule to email or speak to me in person and offer their thoughts about last week’s blog. I truly appreciate the feedback and it was nice to hear from so many of you. I encourage you all to please submit your remarks in the comment section of the blog and to help keep the conversation going about improving our nation’s healthcare system.

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