There is a really big question in health care, one that could shift the entire industry toward more patient-focused care while simultaneously driving down health care costs. Very few people even think about this question. In my experience even fewer, if any, of those who do ask it are involved in developing health care policy at the federal or state level.
This one question, if deployed, would start to solve the issues facing patients, clinicians, payers, hospitals – everyone involved in getting or receiving medical care.
What’s the question?
“How much is that?”
There are two things in play in the health care industry that fly in the face of marketplace sense. First is the lack of price transparency. Imagine going to the grocery store and seeing aisles upon aisles of food … without any prices posted.
“How much is that package of chicken breasts?” “That depends. How are you paying for it?”
My guess is that you wouldn’t shop in that market again. Health care is the only consumer-facing industry in the U.S. that doesn’t have price transparency. Worse, if you ask for pricing, you’re often met with blank stares and “I have no idea” as the answer.
Second is how the prices are set. You’ve heard of the medical billing codes – the Holy Codes that state Medicare and health insurance reimbursement payments for everything from lab tests to joint replacement. The price values for each of those billing codes is set by an American Medical Association (AMA) committee called the RUC: the Specialty Society Relative Value Scale Update Committee. This group meets behind closed doors, creates the pricing list for every single medical procedure, and then publishes it. This is not price fixing, since they hand the list to the Centers for Medicare and Medicaid Services (CMS) for publication, the AMA does not publish the list on its own.
Here’s a critical health policy issue: create price transparency. Require providers to know, and share, the cost of the services they provide to the customers they serve: THE PATIENTS. Doing this will accomplish what all the health care blue-ribbon committees and working groups in DC haven’t been able to pull off: downward pressure on health care costs.
Think about that as you evaluate your choices in the voting booth on November 6, and hold your representatives at the state and federal level to account after they take office. Whether you love Obamacare or not, you know that the health care system in the U.S. must change, for the health of our families and communities as well as the financial health of our national economy.
As an example of the results that a health care consumer can get by asking “how much is that?” I offer you a story off the business pages of the Los Angeles Times. One woman discovered that the cash price for the medical procedure she needed was $1,054, but only after her insurer had been billed $6,707, of which her co-pay was $2,336. If she’d asked “how much is that?” she would have saved herself $1,282. That’s a hard lesson, isn’t it?
How broken is the health care payment model in the U.S.? It’s pretty darn broken, as evidenced by that anecdote alone. By asking for pricing information when making health care purchases, we can have a positive impact on our own financial outlook while simultaneously opening up new communication channels with our health care teams. Their work has value. That value, and its pricing, should be transparent to us. We’re paying the bill: through insurance premiums and co-pays, health savings accounts, self-pay for health care, or a combination of all three.
So the next time you’re buying health care services, ask that really important question: “How much is that?” If you don’t get an answer, consider shopping in another health care store.
That will start bending the cost curve!
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