Consumer Reports: “Health care prices are all over the map”

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A new article in Consumer Reports begins:

If gas stations worked like health care, you wouldn’t find out until the pump switched off whether you paid $3 or $30 a gallon. If clothes shopping worked like health care, you might pay $80 for a pair of jeans at your local boutique and $400 for the identical pair at the nearest department store—and the clothes wouldn’t have price tags on them.

“Why can’t you or I as a consumer ask what it’s going to cost and be met with something other than a blank stare?” asks Will Fox, a principal with Milliman, a national health actuarial consulting firm. The answer, he says, is that neither providers nor health insurers really want consumers to have that information.

Here’s why: The contracted prices that health plans negotiate with providers in their networks have little or nothing to do with the actual quality of services provided and everything to do with the relative bargaining power of the providers.

Here’s what this system means for consumers:

  • Not even staying within your plan’s network will guarantee you low prices. Providers who have a lot of market clout, such as a prestigious university hospital, may command prices several times higher than providers who don’t.
  • It may be difficult, if not impossible, to find out the price of health care ahead of time, especially for complex services such as elective surgery. That’s a special problem for people with high-deductible plans, who may be responsible for the first $5,000 or even $10,000 of their health expenses every year.
  • If you go out of network, whether on purpose or involuntarily, you may be hit with a five-figure bill that your insurance company isn’t obligated to pay.
  • There are ways to protect yourself against being blindsided by a huge bill. But they’re often not easy and don’t always work.

And it includes this table:

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Comments (6)

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Charles Lehmann

June 3, 2012 at 12:42 pm

MRI’s have been around for over 40 years. The problem in medicine is frequently you have to get worse before diagnostic tests reveal what’s wrong. Older MRI’s sometimes require a repeat study but the newer MRI’s identify the problem on the first exam. That machine costs more and improve patient outcomes which warrants higher insurance reimbursement. Otherwise diagnostic facilities would not have motivation to modernize their equipment.

Charles Lehmann

June 3, 2012 at 12:56 pm

The above matrix would be fine if all surgeons had identical skills. Medicine is not like changing an oil filter in a car. The practice of medicine is not just a science but an art. The skill and experience of a surgeon results in an assessment that helps the patient choose the procedure that is best for the patient with the best risk reward ratio for the outcome the patient seeks.

Rob Midwest

June 5, 2012 at 9:25 pm

There are NO objective measures to assess MRI’s, surgeons, or any other Medical Services, except lab tests. How do you measure “quality” of a surgeon? Nortin Hadler and Otis Brawley’s books about treating what does not need to be treated are critical to read. Type 2 Malpractice as Hadler calls it, doing well what should not have been done in the first place. Consumer Reports is absolutely correct. Medical Services should be quantifiable and should have known outcomes and known prices ahead of time. Why would someone pay $100,000 for a procedure that can’t be evaluated or the outcome known? Doctors supposedly use ‘science’ to produce results. Where are the results to measure doctors services?