"Dr. Smith said federal Medicare regulation would not allow for their online price menu. They have avoided government regulation and control in that area by choosing not to accept Medicaid or Medicare payments."
I've suggested that one non-controversial way in which Healthcare could be "reformed" would be to make it easier for hospitals to be transparent about their prices. Any sort of regulation that prevents hospitals from disclosing their prices is bad for the citizenry, please fix that part of the regulations.
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Medicare/caid prices are standardized and public. They also release data on what specific hospitals bill for the most common procedures.
http://www.cms.gov/Research-Statistics-Data-and-Systems/Stat...
Dealing with Medicare/caid involves lots of additional overhead and billing oversight, but that graf is a political cheap shot, not anything related to transparency.
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Hijacking my top comment with a more info edit -
If you don't know, Pricing Data in the US for health care is super insane, partially because both insurers and regulators need billing to fall into a semi-standardized set of 'billing codes' that don't really map well to actual care.
There are regulations about only billing the government for 'procedures' and not 'overhead', and medical procedures often don't map well to billing codes because they're new or slightly different. So basically after a procedure or hospital stay, the care givers make up a basic list of the things they did and the drugs given, etc, and it's passed on to a billing department, who maps to a set of codes that might differ depending on who's paying (gov't vs insurer 1 vs insurer 2). This is by definition lossy.
It's an oversimplification, but one hospital might say "Well we've got a superstar brain surgeon here whose time is 3x as expensive as normal, but can only bill for 'BRAIN SURGEON - 1 HOUR', so we'll crank the prices up on the scalpel and the tylenol to compensate", where another picks totally different things to compensate the prices on because they have a different cost structure.
Big insurers expect to be negotiated with separately for competitive advantage reasons, and sometimes use different billing codes anyway, so even if you had the closely guarded master price list of the hospital, it wouldn't necessarily do you any good.
For the uninsured, the occasional price-insensitive person rolls in (aka the "Saudi Prince wants his own wing for cancer treatment" situation), so they jack the uninsured prices WAY up only expecting a few percent back from 98% of patients. This further breaks the pricing data, and causes major problems for less-saavy people who are used to seeing a bill and being expected to pay it, as opposed to negotiate.
Bottom line: It's complicated, and politically fraught. If you're interested, Oreilly's "Hacking Healthcare" is a great intro to how billing and the new CMS Meaninful use stuff works.
The reason the cost of healthcare is so high is because medicare pays roughly 15% of a bill, others are somewhere between 20-50% of a bill depending. That is to say if the doctor charges you $40,000 you pay your 10% co-pay of $4,000 and the insurance then only pays maybe another $8,000.
Also, just so everyone knows, it's pretty easy to negotiate down your bill. The reason healthcare is so expensive is so many people don't pay it. If you are willing to pay say 40% of your bill it's already 25% better than medicare.
I hope you're right about the government not hindering medical pricing transparency. Now we need to get them to mandate it.
Reason also did a story and short video on the Surgery Center of Oklahoma last year that I think is worth watching:
http://reason.com/reasontv/2012/11/15/the-obamacare-revolt-o...
The center was started by Dr. Keith Smith, who is very much a free-market guy. Even if you don't agree with a lot of his libertarian stuff, you have to admit that he's very well read and knowledgeable of economics, especially for a physician. He runs an active blog at: http://surgerycenterofoklahoma.tumblr.com/
Given that something as simple as allowing Medicare to negotiate with care providers and suppliers as any other insurer is massively controversial, I think you would be amazed just how controversial seemingly-straightforward reforms actually are. Particularly those things that would increase competition and thus threaten the status quo.
A cryptic itemized list, such as a mortgage's Good Faith Estimate (GFE), which falls short of describing the items in the list still fails my test.
This hope is not for me. Its for the misfortunate who run on impulse and have weak mathematical logic. Many people will nod their heads when you mention simple/compound interest or amortization. They will easily dig themselves into holes and take on the realization far too late in the game.
Another favorite which gets thrown in the air: 'Purchase this warranty.' Countless friends and family have worried that their purchase or lack of warranty was a mistake. Asking about said warranty usually results in: 'read the small text in the agreement.' Typically, walking away from the situation completely misinformed by a seller.
As I prepare to move out of my apartment, I received an itemized list (hidden among a contract and various other documentation) which in total amounted to $11,500 in charges for potential neglect in leaving the apartment. Simple things on the list: patch holes ($80/hole), steam clean carpet with receipt ($500/room), replace drip pan ($200), etc. Nothing warns you of the potential threat.
I don't want to be offered a pricing chart when I have a kidney stone or get violently mugged. When that happens I don't want to have to deal with that sort of thing.
The free market in medicine is plain weird. Everyone needs the doctor on occasion, and everyone needs tyres on their car. Both things are pretty standardized, medicine is an established science, and tyres just need to have the correct dimensions and speed rating.
You show up at the doctor's, and they will treat you according to established procedure, most patients do not have complex illnesses, and you show up at your mechanic, and they will put new tyres on. It's very simple.
Yet on TV you see many many more ads for the local hospital or medication for condition X that you see for tyres. How come?
Says you. Time and again, Lasik surgery and cosmetic surgeries not covered by insurance or hindered by over-regulation have shown us that transparent pricing and competition work to make those procedures more affordable -- just like these forces work in other markets.
The State has perverted the medical market for more than half a century and you're just used to seeing it in its current screwed up state.
To live in a capitalist society and accept a service without knowing the cost is a bit scary and stressful. Yes it is your health and must be paid attention but so is maintenance on your house and vehicles and you'd never agree to some service on your house or vehicle for its health without knowing the price. You want at least an estimate before going through with it with that provider.
Contractors for repairs around the house as an example, they vary in quality and price, it is better to make a smart decision than one that is brash and payment is determined after the fact. Granted health costs are harder to predict and extremely important but the added stress of not knowing the cost I think is actually bad for health.
Tires are a simple, well-known product, whereas medicine is not. Drug discovery happens to be a billion dollar process that often results in failure. All of the low-hanging fruit have been taken, and the remaining solutions all require intense research. Though a compound or antibody or whatever might be cheap to replicate once elucidated, you still have to pay the price for the process.
Marketing then directs dollars to product. Drugs often target a very specific healthcare niche, which requires massive education campaigns. Everybody knows that they need tires. Not everybody knows about the existence of a novel drug that solves a medical problem that only a subset of the population encounters.
Here renting property is very well regulated, you put down a security deposit when you move in (usually 1.5 months rent) and then any charges like this are taken from that. The best part is the security deposit legally has to be left with a third party (DPS), and then if the land lord wants to keep any of it, they have to go through the DPS, and show proof of damage and reasonable charges.
On the other hand, the weather here makes me wish I lived in the US :)
If you move to the US and have to rent, find a private owner renting their condo or similar. Never live in an "apartment community" with a corporate owner.
You yourself have trouble with our fine-print-society and yet you still write off the missteps of others who fall into similarly-shaped potholes as a result of their running on impulse or having weak mathematical logic?
There's certainly room for improvement, but it always seemed leaps and bounds better than, say, an itemized hospital bill.
Same thing for new medications: they are not permitted in the clinic unless there is a genuine advantage for the patient.
All this is of course due to political circumstances: medicine is just too profitable.
No. Medicine in inelastic. There is no such thing as a rational demand side, as you don't get to choose if you need healthcare or not. When demand is inelastic, and supply is limited, prices will rise accordingly with no relief in sight.
The solution? Either set market prices (at the cost of stifling supply) or flood the market with supply (using technology to both drive down costs and replace what people do).
Fantastically incorrect! A good portion of medicine is elastic. If you have the sniffles you don't NEED to see a doctor but many people choose to because they can. If you tear your ACL you don't NEED surgery to continue to stay alive but you sure do WANT it.
Furthermore let's just suppose that the demand is fixed and won't change. Demonstrably false but let's just try. Okay. Publishing of prices can still shift that demand from one particular vendor to another depending on price. Just the same as the demand for TP is largely fixed but purchases can be shifted from Target to Wal-mart to Costco depending on price.
Very, very few illnesses are so outrageously life threatening that they have to be performed RIGHT NOW at WHATEVER hospital you're at. That's mostly limited to trauma type stuff from accidents of various kinds.
For everything else like seeing the doctor for the flu, broken bones, joint problems, diabetes, heart disease, etc etc etc you could certainly spend 15 minutes on the internet. And for many of those things you could afford to spend a whole weekend or three if you wanted. For example once you've got an insulin prescription for the next X days/weeks/months you've got tons of time to shop for a doctor that you would like, or who offers a better price, etc rather than the first doctor you can manage to get yourself to.
Not being able to select healthcare based on price means nothing checks rising prices. Regulations have made healthcare into a cartel where members won't compete to be affordable.
That's not true in many cases. I bump my head or get a sore throat, I can choose to seek medical treatment or not. There are also lots of things like "yearly checkups", etc...
Government regulations about not advertising prices blind consumers to the costs of procedures, so hospitals have little reason to lower prices.
It's another case where a small dose of regulation is worse than strict regulation or no regulation.
I'm glad to see another chip in the the foundation of these business models.
Europeans come in two flavors, smug, and really really smug. When will you all get off your high horses?
I think I should say it again because it bears repeating. The country that you just compared america to, implying we are not civilized and germany is, literally attempted to take over the world and exterminate an entire race of people. Civilized? Really?
At least our country was on the right side.
See:
* https://en.wikipedia.org/wiki/Healthcare_in_Germany
* http://www.npr.org/templates/story/story.php?storyId=9196396...
Post-op infection rate - do all clinical employees regularly wash their hands before and after each patient encounter?
Re-admission rate - does the institution or surgeon do enough cases of a particular procedure to be proficient?
Error Rate - Are pre-op checklists ALWAYS used?
Post-op care - Are supportive therapies like Physiotherapy available?
It bugs me to see medical interventions treated like a commodity, these "products" don't always follow generally accepted market principles - a price cut in colonoscopies will not significantly increase demand.
(And yes, there's more to the world than Microecon 101, just as there's more to physics than Newtonian mechanics or thermodynamics, but I still get to assume that glorious theories that somehow fail to conform to such basics are probably in error.)
So, instead, they charge EVERYONE a crazy amount, and then they get X% of the amount billed from one insurance, Y% from another insurance, etc. Fair? Not really -- if you don't have insurance, you get hit with the FULL amount (since you don't have the negotiating power the insurance company has). So while company X paid $200 for an MRI, you'd pay out of pocket $2500 without insurance.
In reality, what happens? Normally, people without insurance are an underserved population. They send them letters, and they don't pay. At the end of the day, the hospital/private practice just ends up writing this amount off, and they call it a day. It ends up being a silly game where they bill knowing they won't get paid, and then spend more money on trying to collect rather than give more realistic prices.
I, therefore, welcome this transparency.
source: I work for one of the largest and prestigious medical/research institutions in the US, and I used to do Analytics for their financial data warehouse.
If they don't, then the problem is that they want the revenue from the higher paying insurance, not worries over fraud.
Wherever you decide to have your surgery, you should inquire about the rate of infection in their facility. Our rate of infection for 2006 was 0.3%, for 2007 was 0.2%, for 2008 was 0.04% and for 2009 and 2010 was .001%. These percentages are astoundingly low compared with an estimated national average of 2.6 % per year.
If you concentrate of endoscopy, elective orthopedic surgeries, and outpatient surgery, the infection rates will be much lower.
compare that to colon and pancreatic surgery or complicated thoracic/lung/heart surgery.
I give them credit though for cutting their infection rate from 0.3% to 0.001%
11Blade (yes. a scalpel)
Plus, the things you mentioned have little to nothing to do with pricing. There's plenty of shit hospitals that charge outrageous fees. Just look at Texas. It doesn't take more money to engage in proper sanitation, it takes good management. These are two separate issues entirely.
There's a lot that cannot be quantified as well.
For example, some doctors I trust more than others because I think their diagnostic skills, empathy, listening skills and ability to absorb case knowledge are superior to the generalized level of their peers' abilities in the same area.
However, I wouldn't want someone to make an Excel spreadsheet with every patient's assessment of his/her doctor in the same way, since I think most patient's judgment skills will be on a similar standardized level that is below what I would need.
It's sort of like martial arts fighters. We can measure number of wins/losses at tournaments, but we can't assess how well they'd do when approaching an unknown situation with assailants who do not play by the rules.
Now, the measurements may not (especially initially) be perfect. But at least you're creating data points that give you SOMETHING to work with.
I get looked-at like I'm crazy when I try to explain my insurance and that I'd like to know more about the cost of a procedure or prescription before I agree to it.
I've always tried to just pay cash for services. Increasingly, though, I'm finding that providers are being put under exclusive contracts which prevent them from allowing me to pay cash. As soon as they find out who my insurer is they clam up, explain that they're under contract w/ that insurer, and say they can't give me cash pricing. It's doubly frustrating because they usually won't talk to me at all if I don't tell them who my insurer is. Catch-22.
The provider ends up billing my insurer who doesn't pay because I haven't reached my deductible. Then I get a bill from the provider, 4 - 6 weeks later. Sometimes the provider allows me to pay the "negotiated price" my insurer would have paid, but other times I've had to pay the full non-discounted amount.
What a screwed-up mess.
Not only that, but one often doesn't know if insurance will cover it, at all. One of my wife's surgeries was "pre-authorized" but rejected by insurance when the bill came through.
Medicare pays only 15-25% of what they are charged, that is to say, if a surgery costs $40,000 they will only pay the doctor $10,000.
This isn't only medicare, it's literally every company. Every single insurance company pays only a fraction (usually 50%$ or less) of what the hospital actually charges you. If you don't have insurance you can just call up and usually if your semi-nice and fairly strait forward you can get the bill reduced to a fraction (30-40%) because that's about what they accept from insurance anyways.
Their prices are simply what they'll get paid in either case, so good job to these doctors, hope it helps less people get scammed and pay their full bills.
They have avoided government regulation and control in
that area by choosing not to accept Medicaid or Medicare
payments.
http://www.cms.gov/Research-Statistics-Data-and-Systems/Stat...
Dealing with Medicare/caid involves lots of additional overhead and billing oversight, but that graf is a political shot, not a fact related to transparent pricing.
http://www.nytimes.com/2013/05/08/business/hospital-billing-...
It's very easy to do the accounting to make the government look very efficient and reasonable, or look like it requires a bankruptcy-inducing level of loss, depending on your politics and the field of medicine.
What I _think_ this statement is really inferring is that they refuse to take medicare/aid and pay the government's lower rates, and thus raised their margins and bottom line, allowing for better care.
This is a pretty standard conservative view of health care provisioning, and I'm surprised that it was allowed into a news story. The whole piece here reeks of being a politically slanted press release, which is embarrassing since it's actually an interesting story, and an editor could've just changed a few sentences to keep a more neutral POV.
The AMA's official position in 1996:
"To decrease the rate of physician supply, limits must be placed on the number of medical school graduates entering GME [graduate medical education]. Since the federal government currently plays a major role in financing GME and is responsible for establishing immigration laws that affect IMG participation in GME in this country, it is imperative that the federal government partner with the medical education community to achieve this goal." [2]
The AMA worked closely with then Speaker of the House Newt Gringich to overhaul Medicare's relationship with physicians. [3]
The AMA is typically the biggest spender among lobbying groups in the health care sector.
[1] http://usatoday30.usatoday.com/News/health/2005-03-02-doctor...
[2] http://www.ama-assn.org/resources/doc/PolicyFinder/policyfil...
[3] http://www.clintonlibrary.gov/assets/storage/Research%20-%20...
WTF?!? I don't know what we charge for a routine biopsy, but for an MRI guided one with vacuum assistance - vasty more complicated, expensive and time consuming - we charge about $2000USD. Come and have a holiday in New Zealand at the same time and it may still be cheaper.
They have avoided government regulation and control in that area by choosing not to accept Medicaid or Medicare payments."
This is simply not true. If they were undercutting Medicare with their pricing, the government would likely have issue with it (i.e. if they were contracted with Medicare but charging Medicare more than what they charge other insurers/patients - this never happens). But their pricing is multiple times what a Medicare claimant would have to pay, so it's a non-issue.
Take, for example, the One Medical Group. They accept Medicare and although the services they provide are limited to primary care, they are transparent with their basic fees. http://www.onemedical.com/nyc/pricing/insurance
Our own medical group is heading in the direction of transparent pricing as well, and we accept Medicare.
Isn't clear pricing supposed to be a good thing? Shouldn't it be actually enforced by law?
Crony capitalism only believes in competition for others. Competition in their own sector suddenly brings doom and the Iron Law of Wages.
The US is one of the countries with the highest expenditure per capita in healthcare and the results simply don't match that. See the graph here: http://www.forbes.com/sites/toddhixon/2012/03/01/why-are-u-s...
"OKLAHOMA CITY – An Oklahoma City surgery center is offering a new kind of price transparency, posting guaranteed all-inclusive surgery prices online. The move is revolutionizing medical billing in Oklahoma and around the world."
Around the world? Really?
> They have avoided government regulation and control in that area by choosing not to accept Medicaid or Medicare payments.
Obama, better close up that loophole! Wouldn't want people to find out that capitalism works in every. single. industry.
Lets not let the bizarre state of the US medical industry act as some sort of straw man to support some ultra libertarian viewpoint.
True competition can always exist unless force is used against someone to stop it (in 99.9% of cases, that's done via government regulation).
> the justice system
The justice system isn't an industry, it's a proper function of government.
> emergency service providers (think fire/hazmat etc)
As someone who has been screwed over by government emergency service providers, I beg to differ.
> Lets not let the bizarre state of the US medical industry act as some sort of straw man to support some ultra libertarian viewpoint.
Actually, lets. The US medical system is a total clusterfuck and is only getting worse. It is hard to get good medical care in the US. There is only one way this complete nightmare could have come about, and that's because people aren't free to act in their own interest.
We could never remotely approach this nightmare in any non-highly-regulated industry.
In fact, practically all non-highly-regulated industries make amazing advances over time, whereas healthcare delivery has seen amazing regress in the last few decades.
This is not an appeal to some ideology that is divorced from reality. The empirical evidence is all on my side, plus a causal explanation for the results. But liberals are covering up their ears and shouting, "We can't (won't) hear you!". As a result, my lifespan and those of my loved ones will likely be significantly curtailed.
"FREE MARKET-LOVING, PRICE-DISPLAYING, STATE-OF-THE-ART, AAAHC ACCREDITED, DOCTOR OWNED, MULTISPECIALTY SURGICAL FACILITY IN CENTRAL OK."
[Edit]: The footer of the hospital in the article: http://www.surgerycenterok.com/
In a corrupt market or system, doing the right thing is in and of itself a revolutionary act. Doctors standing up for what's right instead of their pocketbook and pharma reps is a revolutionary act.
This isn't a new controversy, but still quite problematic - for some fun try Googling "usual, customary and reasonable" (UCR charges).
-- offer a "price match guarantee" against any procedures versus in-network hospitals
-- offer a discount for low-risk patients (non-diabetic non-obese) who need to have surgery done
-- do "bundle deals" with local hotels and/or attractions like they do with plane flights, so if you are travelling to the hospital you would have something for the family to do
-- free 1-month nurse concierge where you can call a hotline to followup after any procedure (would be great for baby deliveries)
-- discount on 3-months of physical training, along with a bundle deal at a local gym
-- offer a "retainer" that would lockin a price of any procedure for 5 years. Good for those who are family planning or have a low-priority surgery
It just seems like there's a market for something-that-doesn't-suck in healthcare.
This sounds to me like an insurance premium, no?
This is great, and I hope it's a sign of a trend.
Sorry to say this but: This whole system is a shame. And i just can't understand why the people in the US just don't realize it.
The solution is to let the "free market" work. Of course, that means we need to regulate the market to fix the existing "market failure." Free markets are regulated markets. (Although not all regulated markets are free.)
All states should pass laws saying that hospitals are free to charge what they want but that their prices must be posted and apply to "all-payers" without discounting. Additionally, states should develop all-payer databases like those advocated by: http://www.apcdcouncil.org/
Much has been said about Medicare in the comments here that isn't quite accurate. The reality is that Medicare ignores hospital charges (except in Maryland) and pays according to their own calculations of hospitals' costs. In most cases, that means they pay much less than they are charged. However, in some cases, it means that they pay more.
For some additional background on this issue, from a New York perspective, see my PDF on the subject linked to at: http://bobwyman.blogspot.com/2013/04/RFC-FRAND.html
Surgery centers do not have the cost of carry of a pharmacy(24/7), a fully functioning diagnostic lab(24/7), an emergency room(24/7), 200-1000 beds, ICU,CCU, radiology department(24/7) etc and an infrastructure that is impressively expensive.
Its very very very easy to offer these surgeries at a cheaper price than a hospital but when you need a complicated surgery or an emergency that surgery center will not be there for you.
I like the idea of pricing transparency but it should be hand in hand with outcome and quality statistics and comparisons should be fair.
I did not see Oklahoma surgery center compare themselves to other surgery centers which are likely very close in price.
One last thing. In healthcare - price is not everything (its an important issue) but as we drive down the price, we must not sacrifice but rather improve outcome measurement and quality.
How is anyone inhumane enough to start a business like these hospitals? Any medical care should be available to everyone. Breaking a finger shouldn't cost $2805 either. Countries like USA think they're superiour but yet they do not help their fellow citizens. If they would drop the war on the rest of the world(incl their own) they would probably afford to provide free medical care as well.
An Expedia for health care services.
You pop in your zip code, the service you need (if you know it), and out comes a list of hospital and doctors with prices for that particular service.
I imagine you could start very simple: call 50-100 clinics and ask how much they would charge for a simple checkup, upload it, see how many people start booking doctor visits via your site.
Check out Zoomcare:
http://www.zoomcare.com/info/services-prices
I went there in Portland and service was great! I loved the transparency. I just wonder why more independent clinics aren't trying this.
Is there some major legal obstacle I'm not seeing?
Bottom line, hospitals are big business and they can get away with billing insurance for a ton... and many times the extra "care" is unnecessary.
When progressive startups say things like "We want you to work, and not worry about your income, so we're trying to pay you a salary that allows you to do just that" we all respect that, right?
Why can we not do the same with healthcare and just say its "free" (aka paid by our pseudo-employer - the Government) so we can all be productive and contribute to making the country/world a better place. Plain and simple...
1: http://www.oregonlive.com/health/index.ssf/2013/05/two_orego...
http://www.caduceusmedicalgroup.com/cash-prices/cash-prices....
Even though I never needed it, having insurance through my employer, it's the transparency that I liked.
Around the world? Not really.
The cited $30,000 surgery costing a fifth of that at the centre makes it well worth the effort to fly from out of state to get your operation on. The old system of charging whatever you can get away with because the patient doesn't have options needs to die a horrible death.
Also last I checked Obama's health care plan passed and it is all about access to and quality of health insurance. There is no evidence that it will improve price transparency from the providers.
Yes, where? You'd think they and the Ron Paul fans would be all over this.
Seriously, political solutions to this sort of complex problem in the USA are very difficult. Blaming any particular political group for a lack of same is kind of dumb.
If this Dr. Smith is improving the state of healthcare as most comments here seem to indicate, then you'll be scandalized by the Gustave de Molinari quote on his blog. It's more Ron-Paulian than Ron Paul.
This is hospitals vs outpatient centers(who can do the easy stuff much cheaper than hospitals can)