Sunday, September 30, 2007

Power to the Consumer

If we want to fix our health care system, first we need to remove the barriers between consumers and their insurance. Second, their providers.

In small companies with newly-installed HSA's, even when the employer funds the deductible, I have already seen and heard of employees communicating with each other regarding costs and quality of service among health care providers. "These guys do that cheaper" or "this office actually starts your appointment on time so you can get back to work on time" etc.

It's amazing what a little free-market magic can accomplish.

Bob Braschler's search for cataract surgery was a real eye-opener. The Mayo Clinic wanted to charge him more than $20,000 for both eyes. Fairview Red Wing Medical Center quoted $18,000. Braschler finally settled on Minnesota Eye Consultants, which charged $10,000.

The baker from Red Wing, Minn., is just one example of how patients are shopping for medical care as they grapple with higher deductibles and co-insurance. A small but growing number of patients are calling multiple places to check prices before deciding where to go, something unheard of just a few years ago.

Hospitals are reacting in various ways. Most are adding staff to answer questions. They're trying to simplify pricing to make it less confusing. Some are even starting to drop prices to stay competitive.
It's no consumer revolution, but it may be the start of one.

Park Nicollet Health Services cut prices across the board by 10 to 15 percent in the past four years, bringing them closer to the discounted rates insurers actually pay, Chief Financial Officer David Cooke said.

Similarly, Children's has reduced prices for MRI and CT scans by 10 to 30 percent after patients called to complain that they were finding lower prices elsewhere.

In addition, hospitals are looking for ways to untangle their Byzantine pricing, which is designed to make sense to insurers and not to patients.

Children's says that it plans to start charging a flat fee for common procedures such as tonsillectomies, instead of charging for time spent in the operating room.

The Twin Cities' biggest hospital group, Allina Hospitals and Clinics, is talking about bundling care for chronic conditions. For example, the hospital might offer one price for a year's worth of diabetic care.


jkruse said...

...Braschler finally settled on Minnesota Eye Consultants, which charged $10,000.

Reminds me of a poster at my mechanic's shop:

"If you think a good mechanic is expensive, try a bad one."

jroosh said...

I don't suppose medicare care is immune (ha! no pun intended)from the old adage:


Pick two.

redBeard said...

about bloody time providers are finally taking notice of consumer-driven competition....