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LASIK Surgery: Model For Reform?

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Some U.S. group health insurance experts see the LASIK eye surgery market as a model for reforming the U.S. health finance system.

LASIK procedures use lasers to ease conditions such as nearsightedness by reshaping the cornea.

Few U.S. health insurers will pay for LASIK eye surgery, in part because some eye doctors still think the risks outweigh the benefits.

The doubts mean that insurers have left patients to haggle over prices directly with the surgeons.

The average price of LASIK surgery fell to $1,556 per eye in early 2002, from an average of $2,180 per eye when the procedure was introduced in 1998, according to Market Scope, Manchester, Mo., a refractive industry newsletter.

When a patient goes to a doctor for LASIK surgery, “you would know exactly what its going to cost,” says Brad Kimler, a health care consultant in the Boston office of Hewitt Associates L.L.C.

When patients get procedures covered by commercial group health insurance, they rarely have any idea what the list price is, let alone what the insurer will really pay the doctors and hospitals.

“Disclosure is a good thing,” says Tim Brown, the senior vice president for select and key accounts at Aetna Inc., Hartford. “Price transparency is available in every other part of our economy. The place it doesnt exist is in medical care.”

Thomas Saving, a health care market economist at Texas A&M University in College Station, Texas, testified in May at a U.S. House committee hearing on Medicare reform that he dreams of the day when doctors and hospitals will market ordinary medical services as straightforwardly as LASIK surgeons market LASIK surgery.

Saving described the LASIK surgery billboards he sees while driving to Dallas from his home in College Station.

“The biggest number on the sign is what, the price, what LASIK surgery costs,” Saving said, according to a transcript of his remarks. “And I keep dreaming of the day when Im going to see a billboard for a doctor or a hospital where the most dominant thing on the billboard is what–is the price to try to attract people by lowering prices.”

Today, Saving said, “if you see a billboard for a hospitalprice is never mentioned because nobody cares what it costs.”

Too often, when patients are buying health care, “people think cheaper must mean poorer,” says Richard Stover, a consulting actuary in the Secaucus, N.J. office of Buck Consultants, a benefits consulting firm.

Meanwhile, provider networks and participating doctors have no interest in seeing their true, discounted fees become common knowledge, Stover says.

Kimler predicts any pressure to reveal prices will come from doctors who are out competing for business, rather than from health plans, employers or government agencies.

Reproduced from National Underwriter Life & Health/Financial Services Edition, August 19, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.