Thursday, January 19, 2012

WSJ Confirms (again) that its Nearly Impossible to Get Pricing from US Hospitals

What are US hospitals hiding? None of the 19 hospitals the WSJ surveyed could say what a patient with Medicare or a patient without insurance would have to pay for the knee-replacement surgery...their best guesses ranged from $33K to $101K...maybe.

Consumers and corporations are usually unable to get accurate information about how much medical treatment will cost them before they receive it, a new government study has found.
Investigators from the Government Accountability Office, a watchdog agency which works for Congress, tried to get upfront estimates from a variety of hospitals in Denver for the price of a full knee-replacement surgery.

None of the 19 hospitals surveyed could say what a patient with Medicare or a patient without insurance would have to pay for the knee-replacement surgery, the GAO reported. Of the 19 hospitals, two did not respond to inquiries, and 10 could not provide any price information at all. The rest offered broad ranges of potential charges, such as between $33,000 and $101,000, or an average charge, such as $82,000, based on the typical charge to an uninsured customer.

Many hospitals said they could not make a good calculation unless they had more information, such as billing codes, the length of time the patient would be in the operating room, the model of knee used or what kind of anesthetic would be provided.

“This lack of health care price transparency presents a serious challenge for consumers who are increasingly being asked to pay a greater share of their health care costs,” it said. (For more on that trend, check out the recent WSJ story on what to expect from open-enrollment season.)
For corporate directors of HR, this lack of transparency makes it not only difficult to compare the return on investment for a global healthcare travel program but also makes it quite a challenge to compute procedural savings for employee incentive programs.

Of course, employers know very well what the costs of providing healthcare benefits will be in 2012. This year, the average cost of an employer-provided family plan hit $15,073, according to a major employer survey by the Kaiser Family Foundation and the Health Research and Educational Trust. That was up 9% from 2010, and represents a 31% jump from five years ago, when coverage cost $11,480.

According to early results of a survey by Mercer, a consulting unit of Marsh & McLennan, about a third of employers are going to bump up the deductible, co-payments or annual out-of-pocket maximum. About 7% will boost some other type of cost-sharing.
So it should come as a welcome relief for corporations that some of the most expensive orthopedic, bariatric and cardiovascular procedures can be done for about 60% less in India or Costa Rica...with superior outcomes and patient satisfaction, when compared to the secretive procedures of US hospitals.

The Role of Empathy in Medical Travel

Having formerly been a CEO trying provide a valued package of benefits for over 700 employees, I am continually perplexed by the decision making process currently being used to evaluate the potential employee acceptance of a global travel program. 

On one hand, there are reservations expressed because the senior execs state " we would not travel over seas for a major surgery, therefore neither would our employees." These execs typically receive first dollar coverage, but their employees have steep deductibles and copays. 

Another benefit of the program is that we encourage employers to share the savings resulting from an employee choosing to travel with the employee.  So the execs are also assuming that their employees would choose to stay at the local hospital, instead of traveling to India or Costa Rica, undergo surgery from a less experienced local surgeon, and forgo putting $5-$10K in their pockets.

Turning the objections around, the case could be made that execs and other employees are costing the company hundreds of thousands per year by blindly following the status quo and using lower quality/hi expense US hospitals versus a vastly less expensive, and higher quality global alternative.  For a manufacture that counts fractions of pennies for each part of the supply chain...I just don't get it.

Given that our program can be implemented at no cost to the corporation...and we now have scores of very happy corporate employees...the reticence of senior execs to offer global healthcare to their employees, as an option, continues to be perplexing.