Exposing the Cost of Health Care

by Larry Emmott on November 30, 2011

in Health Care Politics,Internet,Management

Can you imagine going down to the Chevy dealer and picking out a new car, selecting the color and all the options you wanted including the engine, transmission and fancy wheels and then when you ask the salesman how much he won’t tell you?

“We don’t know the fee.” He says, “We will just send you a bill after you pick up the car.”

That’s nuts, no one would consider buying a car that way and yet that is exactly the way people buy medical care every day.

Recently a good friend has been put through the medical ringer with multiple tests, diagnostic scans, doctor visits and biopsies. In two months he has had an MRI, several ultra sounds, three blood tests, a CAT scan, two needle biopsies, a nuclear medicine scan, an endosocope, two urinalysis and even a breath test to check for infection. All of these tests, scans, office visits and lab procedures were undertaken without the least idea of how much they would cost.

(BTW all of these procedures were undertaken to follow up on various vague symptoms and so far nothing serious has been discovered.)

The only way this behavior, that is agreeing to purchase a service without knowing the price, is conceivable is that as the patient we actually don’t pay. The insurance company pays so we don’t care. If we were spending our own out of pocket money of course we would care. We would demand to know the actual fee ahead of time and we would carefully weigh the value of the service before agreeing to get it done. Third part payers whether they be an insurance company or the government distort the normal buyer seller relationship.

As the person receiving the service we get all the benefit without paying the cost so of course we want all the service we can get. This of course drives up the cost of our medical care. On the other hand as the payer the insurance company or the government needs to limit the services to control the costs. The clash is inevitable.

The payer must limit access to care in some way. They must ration care. However this concept is so odious the payers will go to incredible lengths to deny that they are rationing while doing it constantly by various covert means.

If patients had more skin in the game, if they had to pay more of their own money I believe they would make better more cost effective choices and this would force medical providers to find less expensive options and would put control of most health care decisions back in the hands of the patients and their doctors and out of the hands of clerks and bureaucrats.

However with our current system even if a patient wanted to compare prices there is no way for them to find out the cost of a procedure beforehand. The article linked below talks about an online system to compare medical costs in order to help consumers make better choices.

Its easy to compare prices on cameras, vacations, and homes. But in the United States, patients fly blind when paying for health care. People typically dont find out how much any given medical procedure costs until well after they receive treatment, be it a blood draw or major surgery.This lack of transparency has contributed to huge disparities in the cost of procedures.

via Exposing the Cost of Health Care – Technology Review.

BTW in the various areas of medicine where consumers are choosing elective procedures and using their own money such as Lasik surgery and cosmetic procedures providers do compete on price and the cost of these procedures has come down over the years.

by: at .

Share

Comments on this entry are closed.

Previous post:

Next post: