Another boring “business of healthcare type post?” Really? Yes, really. While this isn’t specifically related to my previous post, it does affect it. It also may not be specifically transplant related but it also has an impact there. I’m sure it’s not my only healthcare pet peeve, but a larger one. It’s also one I’m sure that concerns many of us. Maybe it’s an even bigger issue than the few I pointed out in my previous post. It’s the P “word” – price transparency. What the heck is it? Why should we care?
Because, like it or not, the majority of our “bitching & moaning” about the system comes from a large medical bill, denied insurance claim, or some iteration of the two where we are left holding the bag & having to “suck up” a large expense – expected or not.
Kevin’s post (penned by Regina Druz, MD) is good food for thought. But I want to step away from the issue of patients feeling a bit dissatisfied with their doctors to focus on one the items he unveiled as a potential Katniss in this situation. Let me make this a clear scenario why the residents of District 13 should be rallying around a Katniss I know. I’ll be the Effie.
Prior to “Obamacare” (I hate that word, let’s call it by it’s proper name, The Affordable Care Act), whether one noticed it immediately or not, more & more employer plans were having issues making ends meet period. Struggling to find ways to get their employees the coverage they needed without the breaking the bank or taking too much out of a paycheck in the way of premiums.
This was not something I fully understood until I started working behind the scenes in the sector & saw how much claims were costing everyone. This is regardless of carrier, regardless of service. Yet, it’s something I can appreciate because I learned most of my skill in dealing with claims issues prior to this on my own from a high-deductible health plan with a Health Savings Account. This was such a poor choice for me, but because no one from the carrier or the HR team (at that time) really broke it down in a way I understood; I was left to muddle through on my own. I thought it might work – as it looked decent on paper. Not the case. But at least it helped me understand the healthcare mess even though I found out about it the hard way. I was not the only one who was confused & struggling to make sense of things either.
That’s why, when afforded the opportunity, I jumped at the chance to work on the inside to learn more about the business aspects of health insurance but then hopefully gain enough “inside baseball” to help myself (& potentially others) in the process if I ran into a hurdle down the line.
To put this in simple relatable terms let me start here: because of tuberous sclerosis complex (TSC) & because of lymphangioleiomyomatosis (LAM) I often need annual imaging or at minimum once every 2 years on certain organs. This usually is in the way of an MRI, CT or both in the same year depending on the organ & the timeframes of when they were last done. Now, we all know how costly these scans are, right? Well, we think we do….but we really don’t.
We know that facility or hospital where we get it done is bills the insurance. We know what our “discount” off those services is from the explanation of benefits we get after it processes through. Then we go from there as far as our cost whether it’s more if we haven’t met our deductible, or less because we have met our deductible & have a co-insurance or percentage to pay. But the true actual cost remains hidden. We do know that it’s expensive & that’s why the insurance is only going to consider paying after we meet the deductible (in most instances).
What most people don’t realize is getting a real price on an MRI or CT is not the same as getting an estimate to get a front bumper fixed on your Honda after a deer hits it. One might get 3 estimates for that repair that usually fall within a set range. The auto insurance carrier pays the shop or sends the check. Then the remaining deductible is paid on one’s own. Yet, in the end one knows roughly how much it will cost to fix that damage. They know that in both in the way of any personal responsibility & then also the insurance responsibility. Healthcare services don’t work the same way. It’s not the same thing as getting a car or a home repair.
One independent facility up the road could charge a patient without insurance $400 cash to have an MRI after they break their wrist hitting it on the mailbox after they slip on the ice while shoveling (for example). But that $400 may not be what the rate is for someone with insurance. It could easily be double. Add to that fact, that there’s no way to know ahead of time. Plus, even on those claims where one has a responsibility, one usually gets a discount if they are in-network with the insurance. So it could be the same amount or entirely different.
Let’s say Haymitch (with no insurance) pays $400 cash because this happened to him. Let’s say Heavensbee has the same unfortunate circumstance as Haymitch, but has insurance so he pays nothing now. He sends his claim in to his insurance, waits for it to process. Heavensbee’s benefits are set up at 100% coverage after a $2000 deductible (I’m keeping this simple & not complicating it with health savings accounts or health reimbursement funds from an employer to muddy the waters). Heavensbee finally gets his explanation of benefits a month or 2 later. He sees that charge at $800 for that same test that Haymitch paid $400 for. If he’s lucky, He gets an in-network discount of $400, so then he really only has to pay $400 . In effect gets the same cash rate in the end as Haymitch did (lucky him). This is the outcome in a “perfect” alignment of fortune.
But let’s say though for the sake of argument that Heavensbee’s discount is only $250 instead of $400? Then he’s essentially paying MORE for that same MRI as Haymitch, EVEN WITH insurance. Heavensbee ends up paying $550 in the end run (since his deductible was not met), which is actually more than Haymitch who paid cash outfront.
Let’s take this a step further. Let’s say next year Heavensbee is still complaining of pain during the winter. His specialist tells him to get a repeat scan to check for tissue damage or arthritis. Two potential problems that could be causing the issue. Knowing the deal last year he reluctantly agrees to it, but is disgusted at what he paid last time. He figures he will try another place that’s closer hoping it will be cheaper since it’s affiliated with the hospital. Perhaps it will come out to less?
Later on, he is even more miffed to see his explanation of benefits come back with a $1,200 charge, a discount of $500, & since his deductible restarted again, he’s back at assuming the cost after that discount. His in-network discount is larger, but so is the initial charge. It’s $700 now that he has to pay for this year’s MRI versus last year’s. (Haymitch’s deal is looking REALLY good right now -almost a steal).
He calls his insurance company fuming & wants to know why he wasn’t told about this ahead of time when he called verifying that the hospital was still in-network. He mentioned it, after all. Even complained about the cost last year to the another agent on the phone. He asks to speak to a manager. Surely Caesar could tell him which place to go that’s cheapest…
Well, the reason Caesar can’t is, there is no transparency (to agents on the front lines, their managers, or anyone) about what a hospital or facility can charge for service or what they can bill an insurance for a service. There’s no transparency on the negotiations for what in-network discounts that are applied for those services either. How do you figure this out if all you can go by is an estimate of a cash rate (which might be less than half of what they actually bill)? No wonder people call up hopping mad, demanding to know why they are being ripped off because they very well could be or feel that they are. They’re not getting a discount on the “cashman’s” rate for using insurance. It feels like they are being penalized for having it & using it at all.
Many blame the Affordable Care Act for this incorrectly. It’s been happening for years, & it just now caught up to them or their employer. Costs go up, discounts fluctuate & change. People can change carriers & plans frequently. Along with that the coverage & percentages of what the insurance covers & when also changes year to year. It’s enough to make anyone’s head explode.
Blame the doctors? No, they don’t set the rates for these services or even their own rates for co-pays, etc. They just see the patient & recommend the tests. But even they are getting increasing complaints about cost & if these tests are really warranted for the money. (Which, it’s true to a degree there’s always some degree of unnecessary testing that takes place.) Most doctors do this day in age, only try to recommend what they know their patients need & can afford because if they don’t, they get an ear full later. But they aren’t privy to these closed-door negotiations either.
The insurance carriers (many of them) don’t want transparency either because what if say a Blue Cross is offering a lesser discount than what Aetna gives? Neither carrier wants that made public for various reasons. Hospitals often negotiate pricing based on Medicare/Medicaid reimbursements & know they can get more from non-Medicare/Medicaid plans. So they don’t want pricing disclosed either.
Not every state has an Affordable Care Act health exchange either, so there’s no incentive or competition for better plans or in turn better pricing. No carrier (if they deem it as a losing proposition) wants to go first to be the one to put it all out in the open. Nor does any hospital want to take less, especially if they aren’t liking what they are getting from the Medicare/Medicaid arrangements so you’re out of luck getting any transparency discussion from them.
It’s a huge mess. In the end though, aren’t we ALL going to lose money & face collapse of the system eventually if we don’t level the playing field somehow?
We need to somehow destroy the game like Katniss did in Catching Fire. It’s a big enough issue to trigger the rebellion…
So what’s a person to do? Lucky for us, we do have a Mockingjay.
Our Katniss is none other than ClearHealthCosts.Com. Their goal is to encourage people to self-report such scenarios as the one I laid out between Haymitch & Heavensbee. They then independently verify that self-reported information & log it in to their journalist-curated system. The result is beautiful.
For most major procedures, no matter what they are (in certain states) someone can type in the procedure or pull it down from the menu & get an average cost for it. It’s simple enough to use even if somebody don’t know what the heck a CPT code is, the information can still be pulled up.
If you go the site’s About page, it explains the work & how they do it. It even shows how to self-report information.
In order to expand this important work, the founder, Jeanne Pinder, has worked hard to forge relationships with other news outlets (like Medpage Today, like the NPR affiliate WHYY) to bring this tool to more areas & to allow more people to self-report their own claims data.
This can only serve people in the end because the more these costs come to light, the more onus there will be on the providers & insurances to make moves towards being more transparent.
This method of collecting data is called crowdsourcing & in this environment it needs to be as popular as crowdfunding is today as a concept if we want to be able to have an armed defense for getting healthcare pricing out in the open & under control.
There you go, Kevin. There’s your Katniss, & crowdsourcing is the arrow for transparency. Transparency is the real weapon (the bow). The rest will come along in due time.
Now for the rest of you who are still reading this, hopefully I have not put you to sleep. At least it’s more entertaining to try & frame it around a Hunger Games character type of scenario.
I know all these facts & figures are a befuddling mess to the every day person. Yet if we are really serious about getting our own healthcare costs under control, we have to get our heads in the game when it comes to basic understanding of our insurance plans & how they work. That means trying to learn & understand how a claim makes it way through the system because ultimately that’s how our “responsibility” is assigned.
This is just as important for healthy people to understand as sick people, because one day anyone could be the Heavensbee in that situation above (even if we’re otherwise healthy).
For people with chronic illness, it’s especially important to try & budget out our costs relative to what our premiums are to avoid having to bleed out profusely year after year.
Or… we can continue on status quo as we fork over more of our own hard-earned cash without paying attention to where it’s going & continue to grumble & complain about how much everything is costing.
As a final aside: We don’t buy auto & home insurance without knowing how it works & shopping around. We need to take the same approach with shopping around for health insurances, even if it’s not an apples-to-apples comparison about coverage & how it works.
We can’t rely on anyone to do it for us. But at least we have a strong tribute to help us along the way.