January 9, 2006
Service and Financial Transactions in Healthcare
I hope by now you are getting sick of my repetition that:
Healthcare will never be “fixed” until the service and financial transactions take place between the same two people.
Maybe 2006 is the year we see significant movement this direction. The continued rise and acceleration of the consumer movement in healthcare is the only answer that has a chance to work long term to deliver both the care we want at prices we can afford.
If Sarah Rubenstein writing in the Wall Street Journal December 28 is even close, “Patients Become Consumers” in 2006.
One of the untruths perpetrated by many, including much of the medical and mainstream press, is that “consumers” will pay a larger portion of health care costs in 2006.
Let's set the record straight: Consumers do now and will always pay ALL healthcare costs. They can't pay more than 100%. All payments for healthcare start in consumers' pocketbooks and are rendered in one of three ways: direct payment, taxes, or forgone income bartered on your behalf by an employer as a “benefit”.
It is the direct payment portion that is increasing and hence becoming visible to the consumer. That's great and is to be celebrated!!
The article suggests four important trends for 2006:
• Shopping for price before your appointment
• Pay less for some doctors -- or more for others.
• “Healthcare coaches” join the team.
• Infant Health Savings accounts become toddlers.
This report suggests small intermediary steps toward consumerism and either explicitly reports these as health plan initiatives or mediated by health plans, a potential limitation for success.
Although it is wise to wonder if health plans ever really have the consumer's best interest at heart, in this case there may be a convergence of goals. Employers, the third party, who are the ones who hire the fourth party—the health plans--to manage the bartered benefit they “give” employees with the employee's money, really, for the most part want out of the Cartel and out of the healthcare business.
This is a positive development for consumers. It gives a chance for the first time in sixty years or so for the rationalization of one part of the financial system of healthcare. The government is another story.
Shopping for price : “ It's tough to shop around for medical services when one of the most important pieces of information -- price -- is often far from your grasp . This year, Aetna Inc., in a pilot program , made available online prices it has negotiated with Cincinnati-area doctors for hundreds of medical procedures and tests. Expect insurers to make more prices available in 2006.”
“Cigna Corp., for example, in a pilot program, plans to reveal price ranges for 19 procedures, including endoscopies and MRIs, at specific medical facilities in a few markets. Cigna also plans to reveal the average regional costs of doctor visits of different "levels" of complexity, explaining to patients the services they typically would have received if they were charged for a more-complex visit. Aetna says it plans to expand its program to more markets in 2006.”
She doesn't say the most important thing. ALWAYS ASK AND NEGOTIATE PRICE!!
Paying more or less for doctors : “A high-performance network is essentially a network within a network. Insurers in general are looking at their claims, and in some cases evaluations from outside groups, to designate some doctors within their networks as "high performing" -- those who provide both high quality and "cost-efficient" care. On cost efficiency, for example, over the course of treatment these doctors might avoid ordering unnecessary MRIs or prescribing high-priced medicines when there are cheaper alternatives, insurers say. Fees they say, are a factor too. Quality can be measured based on treatment practices.”
The fallacy here is obvious, the health plans shouldn't be doing this. The market and consumers should. Health plans may be helpful as data bases for accessing important information. So make your data transparent for all. (see Transparency) And then if the service and financial transactions took place between the same two people, in time, true pay for performance would occur and “high-performance networks” would “self-organize”. No need for the central planning.
Healthcare coaches as described here as “value coaches” for the health plan--that is getting you to the right service at the right time, etc--is an intermediary step primarily designed to save the plan money. Eventually, it will be automated (see Decisioning) But it helps the consumer too, so OK. Real healthcare coaches in the future will coach specific skills, motivate, and support confidence for attainment of personal health goals.
Health savings accounts. “HSA debit cards -- which let you spend money out of your HSA without writing a check -- debuted in the past couple of years. Now some companies that offer them are looking to add credit lines to their HSA cards in 2006. The credit lines are one way to address a practical problem: Because some employers contribute money to workers' HSAs on a paycheck-by-paycheck basis, patients can run into problems if they have big medical expenses early in the year. An HSA credit line would be a way to pay for that care now, even if your HSA hasn't filled with enough money yet.”
Baby steps, but we are all for them. Much of this is directionally correct and supported by the principles of the Abramson Center (Transparency, Visibility, Decisioning, Distributed Healthcare).
Let's see how we feel about it come January, 2007.
Robert B. Teague is a pulmonologist and business consultant who is based in Houston, Texas. E-mail him.
Read other blogs in this series.
