March 7, 2006

Healthcare

Hospital Attitudes Towards Healthcare Delivery II

Carroll Andrew Morse

The Providence Business News article by Marion Davis on healthcare pricing also discusses legislation introduced at the behest of Governor Carcieri...

Gov. Donald L. Carcieri this year is pushing for legislation to require health plans to disclose to patients the negotiated amounts they pay to providers for services, procedures, tests, drugs or supplies that are subject to a deductible or coinsurance.

Prices for the most common items would have to be posted on the Internet, while the rest would have to be disclosed over the phone upon request.

The disclosure provisions are included as part of Senate bill 2614, introduced by Senator Leo Blais (R-Coventry/Foster/Scituate), scheduled for a hearing tomorrow.

Both hospitals and insurers seem to think that disclosing the price of hospital costs is a bad idea...

Stephen J. Farrell, CEO of UnitedHealthcare of New England, has already expressed concerns about the legislation (Blue Cross & Blue Shield of Rhode Island did not reply to a request for comment for this story). Hospital executives aren't keen on it, either.

For starters, they say, the information is proprietary, part of their business dealings. Secondly, they say posting prices alone to guide consumers could be disastrous, because price is only one of many important factors they should consider.

"I happen to be a fan of consumer-driven health care," [Lifespan network senior vice president John] Gillespie said, but "it is utopia to say we're going to have a totally transparent system" with prices on the Internet.

[Women & Infants CEO Constance] Howes and [South County Hospital CEO Louis] Giancola noted that prices alone can be deceiving, too, because consumers won't know if a higher fee reflects higher-end equipment or expertise. Hospitals also have to keep their equipment available 24 hours a day, Howes said, and that increases their costs.

A concern about people making healthcare decisions based purely on costs is understandable. However, the executives quoted above seem to be taking this to an extreme.

People are able to realize that price is not the only factor in decision making. An appropriate analogy here is higher education. The tuition at Brown University is very much higher than the tuition at Rhode Island College, yet the difference doesn't create a shortage of students wanting to attend Brown. People are willing to pay extra for the advantages -- that could accurately be described as advantages in "higher-end equipment and expertise" -- that Brown provides.

In an emergency situation, of course, you go to the nearest hospital available. But in non-emergency situations, is there really an argument against giving people information that can help them more easily match their needs with their means?

8:25 PM
Comments, although monitored, are not necessarily representative of the views Anchor Rising's contributors or approved by them. We reserve the right to delete or modify comments for any reason.

Andrew do you and your fellow blog contributors plan to set up a free flowing open forum type of section on this site?
With all due respect (you all do very good work but often times it's not very current or local and doesn't address the topics people are talking about around Rhode Island) I think you're missing a big opportunity to grow this site because you do not promote local topics or promote feedback on those topics.
I guess what I'm asking is do you want your blog to have the dynamics of a library, which is what you have now, or do you want your blog to have the dynamics of a debating club or a corner bar?
Your thoughts?

Posted by: Tim at March 7, 2006 8:52 PM

For what it's worth, here's a copy of an email I sent to Donald Williams, at the Dept of Health in RI, back in September of 2005.

He replied saying that while my idea was a reasonable one, he felt there were factors that would complicate the matter and make it not be possible. He did, however, say he would forward my suggestion on to the new director, Dr. Gifford.

Donald Williams
Division of Health Services Regulation
Rhode Island Department of Health
3 Capitol Hill, Rm 410
Providence, RI 02908

Dear Mr. Williams,

I am writing to make a suggestion which I believe would substantially improve cost-effectiveness for health care in Rhode Island. As a social worker as well as a consumer of health care, I believe it would be beneficial to all citizens if there was a way to find out the fee schedule which a medical practitioner charges for the normal variety of procedures and examinations he/she performs. With the rising cost of health care and the rising share of health care being paid out of pocket by consumers, this would make it possible for consumers to find out what a doctor will charge them, and help them choose a provider who is cost-effective as well as highly qualified.

The state Department of Health would be the best (in fact, probably the only) agency that could compel practitioners to disclose their fee schedule. Providing a fee schedule to the department of health could become a stipulation of being licensed as a medical provider in the state.

I realize it would be a very large project to collect this data, but disseminating the information would be relatively low in cost if it was done on the internet, as it would be possible to do this without incurring the costs of printing and publishing, other than in the electronic venue.

This idea occurred to me as I recently experienced major sticker shock at the costs of medical care for the pregnancy and birth of my second child. This made me realize that, while there is much talk about the need for health care consumers to "shop around" in order to get the best price for their medical care, there is no actual way to do this. We need help from our state regulatory agencies to make this "shopping around" possible.

Thank you for your consideration.

Sincerely,

Kiersten Marek

To follow up on what the CEO's responses were to this idea, I am not surprised. No one wants to really put their prices out there because then people might question them. Also, it would force price competition between practitioners, which they do not want. They want to fix the prices and then keep them secret.

Posted by: Kiersten Marek at March 9, 2006 4:47 PM