Medical Costs and Transparency – from WSJ

Thanks to the hard work of those who founded this blog and for those who insisted on inviting me. I have only scorn for those who failed to do either of the above, particularly those who failed to do the later.

There was a commentary in today’s Wall Street Journal discussing improving transparency in our health care system by publicly releasing data contained in insurance claims which is required under the ACA. The title of the article is More Transparency, Better Health Care but it is behind a pay wall (although I managed to get the full text as part of a “free pass”).

The commentary is quiet short and superficial, but it had a few interesting highlights that may be worthy of additional thought and discussion:

Rates of preventable diseases, hospitalizations, complications and readmissions vary greatly among health-care providers.

This sort of addresses something NoVa raised at the PL a while ago (although not exactly the same) in that there are often large regional variations in treatment regimens that lead to disparate spending and outcomes. Some of this is understandable as population differences will impact treatment differences, but it seems to me that there should be fewer differences than presently exist. The question, of course, is how do decrease those differences. I wonder what role competition plays here. Competition between health care providers may decrease cooperation and sharing knowledge but should also spur innovation (although under the present system there is less incentive to prevent disease or prevent readmission).

Too often, unnecessary, redundant and needlessly expensive tests and treatments are prescribed.

Well, now we’re just stating the obvious in a very unhelpful way. The reasons these treatments are prescribed vary widely.

Controlling costs without compromising quality will require multiple scalpels rather than one blunt instrument. Public reporting of performances measure could provide those scalpels by allowing the public to compare doctors and hospitals based on cost and clinical results.

Now we get to the crux of the commentary and to an issue raised by other PL contributors. Would a more informed public make better decisions with their health care dollars? The authors answer in the affirmative, but fail to provide any real explanation as to how or how much. I think it would be hard to argue that making the data available is a bad thing (assuming the data is accurate) but I am skeptical that it would make too much of a difference. We often don’t have time to comparison shop and even if we are afforded the time to do so, would we take the time to do so and would the time we spend shopping really be time well spent? Perhaps more importantly, as long as we still have the same health insurance system, won’t people just choose the person with the best “stats” regardless of costs? This seem particularly true when we consider that most health care dollars are spent at the end of life and often those treatment decisions are made by spouses and children who are both emotionally invested and, with respect to children, not impacted financially (inheritance aside) by how much a given treatment decision costs.

I wish the article had been more informative, but I do think it is good starting point for a conversation.

12 Responses

  1. I try to do it every time I sign up for the company-provided health insurance. Currently, I have been to more bad and mediocre doctors than I have good ones; and yet, my coverage doesn't vary.I would LOVE to see those stats! Then I could make a properly informed decision as to what I am willing to compromise on due to affordibility, and what not.

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  2. Hi ashot, as you might guess I have some thoughts on this, but my husband just game me a warehouse job to do…………..gotta run. I'll check back in a few.Glad you're here and I think NoVA will be signing on as well.

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  3. For example, I tend to pneumonia pretty easy, but since I refuse any high impact exercise, sports medicine has nothing for me.I will pay for the (don't feel like looking up terms) pneumonia doctor long long before sports medicine.I will never have children, but I will pay out for women's health before I will pay for … a proctologist.

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  4. ashot:You need a headline on your post.

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  5. Redundancy is avoided in the clinic health care model. Mayo, Cleveland, the SF 45 neighborhood clinics, Scott & White here in cenTex all provide first class care and preventive care as well, all at least 40% cheaper than the national average. In other words, we know ow to do delivery of service but we do it sporadically.This morning's Austin paper says there is an initiative to bring 13 SF type neighborhood clinics to Austin. In SF, this is a public-private partnership. I think I can find a link for y'all, but not now. My migas have arrived.

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  6. ashot, I ranted a bit about this yesterday. In my personal case, knowing about my and MrJS's medical conditions and treatment options does save the taxpayer (we're both on Medicare) more money than always following our doctors' recommendations.And, as Mark mentioned, there are many ways to run good health care establishments and some cost a lot less than others.

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  7. Thanks all and to whoever added a headline. The thrust of the article and post is about addressing these problems by creating more informed health care consumers. There certainly are other ways to address the problems and the Mayo Clinic is a great example.

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  8. "Thanks to the hard work of those who founded this blog and for those who insisted on inviting me. I have only scorn for those who failed to do either of the above, particularly those who failed to do the later."Everyone here has both worked hard on this blog, and everyone currently active (that you see participating in these threads) insisted on inviting you. So there is no one upon which to place your scorn.

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  9. ASot, I added the title. It is to me a horse and cart issue. The clinics do a great job of disseminating useful info to the members. So does Kaiser-Permanente. My Clinic says the more I know the more I can tell useful info to my doc. But they also give patients choices between meds wherever possible and explain all the features and drawbacks, as well as the pricing issues. They even do this when the post insurance contrib pricing is the same to the patient. Thus a patient can make more educated choices. So I am guessing that the most transparent providers are in clinics and the best informed patients are in clinics. So I skipped the part where we speculate what would happen if hospitals were transparent. They most certainly are not, btw.Glad you are here!

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  10. I think there is an assumption by some that consumers prefer not knowing the cost or alternatives to treatment or that we like the system we have precisely because we're happy just paying our co-pays and going on our merry way. I doubt that is the case and transparency and analysis would be preferable for most I think.Does the health care bill adequately deal with transparency or is there really some debate over whether said transparency is beneficial or not?

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  11. Anecdotally, yes information can help make healthcare consumers more spending-savvy. At my wife's place of employment (where she is in HR), they publicized the relative costs of the more expensive treatments in their population & noted where the least expensive services were available. They reminded the employees that the company is selfinsured & keeping costs down would benefit everyone directly via lower premiums. They have noticed behavior changes in their population as a result.

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  12. bsimon, that's a very gratifying observation. I really do believe that if given the chance, people would make wiser decisions. I work with people on hospice and many of these patients make really tough decisions about their health care. It's not always because they have no choice but sometimes because they recognize the futility and don't want to continue wasting time and money, believe it or not.

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