Consumers might do a much better job of shopping for health care if they knew what care cost.

Arnold Milstein, medical director of the Pacific Business Group on Health, San Francisco, presented that radical argument in February at the congressional Joint Economic Committee hearing on consumer-driven health plans.

There is a “substantial information barrier to consumer identification of the most affordable providers,” Milstein testified.

Plastic surgeons and other doctors who get most of their payments out of consumers pockets are quick to disclose prices and compete on price.

Squeezing price information from other doctors is difficult.

Insurers like the idea of giving consumers more price information.

“Were just getting people used to the idea that health care has a cost, and that its not $10,” says Meredith Baratz, vice president of marketing at iPlan, the consumer-driven plan unit at UnitedHealth Group Inc., Minnetonka, Minn.

But iPlan cannot disclose the rates the doctors in its networks charge because the provider contracts forbid disclosure of price data, Baratz says.

Only 1 of the 15 plans that Milstein has studied provides detailed provider price data.

One of the leaders in the effort to let the sun shine in, HealthMarket Inc., Norwalk, Conn., publishes specific physician cost information on its Web site. But the site simply gives the cost of certain popular services. To get the cost of other services, patients still have to call the doctors.

Employers are starting to complain, says Steve Kaczmarek, a consulting actuary in the Hartford office of Milliman USA.

He recently talked to a benefits manager at a U.S. employer with 24,000 employees. The benefits manager is thinking of terminating the companys relationship with its health insurer because the carrier refuses to reveal price information.

The benefits manager “felt his employees really needed that information,” Kaczmarek says.

In California, lawmakers tackled the problem in September 2003 by enacting A.B. 1627, a bill that requires hospitals to disclose their complete price lists and create summaries that give the prices of the most common procedures.

But Milstein noted in his congressional testimony that long lists of prices for specific products and services might mislead patients, because doctors can game the system by ordering large numbers of low-priced procedures.

Patients are better off finding out how much treating a particular acute condition will cost or how much treating a chronic condition will cost over the course of a year, Milstein said.

Milstein said the federal government could help by funding more health cost and quality research and giving private organizations better access to the Medicare programs huge claims database.

The government should hold “back data only to the extent necessary to protect the privacy of individual Medicare beneficiaries,” Milstein said.

–Allison Bell


Reproduced from National Underwriter Life & Health/Financial Services Edition, March 12, 2004. Copyright 2004 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.