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On the Third Hand: A Price List MRI

by Allison Bell

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Few really like the idea of promoting more government intervention in the health care market.

Most folks who think much about it generally like the idea of getting consumers more involved in shopping for efficient, high-quality health care. Most patients who are actually shopping for non-emergency care probably like the idea of trying to maximize value. Who wants to think that your expensive, wasteful checkup helped send the whole U.S. health care system into an irreversible tailspin?

Even the Centers for Medicare & Medicaid Services (CMS) likes the idea of promoting consumerism when its traditional Medicare funding is involved.

Medicare policymakers hate Medicare Advantage plans and Medicare supplement insurance that close too many of the gaps in traditional Medicare coverage. CMS officials want Medicare enrollees to pay at least some cash out of pocket when they get anything other than routine preventive care, because they want the enrollees to feel a little of the economic pain associated with health care spending.

But the problem with sending consumers out to drive the health care system in the world as it exists today is that the bills patients get often seem to have come out of a random number generator. The patient goes in feeling fine, just to get a little of the basic screenings everyone seems to be desperate for people to get, and walks out with a big sick visit charge.

Go in for a checkup and ask the kinds of questions healthy people ask — What do you think about that mole? Is it normal for my vision to get a little blurrier when I’m 40? — and you can easily walk out with a $400 bill for what you thought would be a package of “preventive services provided with no out-of-pocket cost-sharing requirements imposed on the patient.”

One solution could be that the government could simply set fair prices or create an official price disclosure system.

But, really, why? The government-run price disclosure system probably would be complicated, hard for doctors to use and hard for the government to police in any serious way.

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How about this solution instead: Doctors and hospitals could get whatever antitrust waivers they need to set up their own voluntary price disclosure system. Maybe they could work together with a consumer group (AARP? Consumers Union? Families USA?) to give it extra credibility. Then, the doctors and hospitals could meet their own price disclosure standards, using procedures they’d designed themselves. Maybe they could persuade the insurers to participate by helping to provide repriced prices that reflected the expected provider contract discounts, but, even the discounted figures weren’t available, patients could get the billing codes and the doctors’ own billed amounts.

Patients and consumer groups could police the system by simply posting complaints on the Web when bills proved to be much different than what the patients had expected.

Patients would feel more confident about knowing what their bills would be.

Doctors and hospitals would seem less like a bunch of crooks.

Insurers and employers could offer high-deductible health insurance plans with a clear conscience, without having to worry that they were putting patients at the mercy of billing wolves.

On the one hand: If health care providers did their own service fee MRIs, they could come up with a practical, flexible system that was easy to use and good enough to satisfy most patients’ medical fee information needs.

On the other hand: The self-made disclosure system might not be completely trustworthy, and the United States is full of examples of self-regulatory groups that turned out to be almost as bureaucratic and annoying as government agencies.

On the third hand: It seems as if there ought to be plenty of easy ways to use patient ratings to provide price disclosure reality checks. Patients could, for example, predict what their care will cost when they make an appointment and again after they get the compare, and a computer could then compare the appointment-stage and point-of-care cost predictions with the actual billed charges. The numbers themselves could expos the phonies without a Professional Fee Disclosure Board having to rap anyone on the knuckles.