There are challenges with medical costs in America. For some reason, medical inflation has run well in excess of inflation generally. See Medical Charges and Challenges (June 2019) and The Conundrum of Medical Inflation. The simple fact is that medical care costs in this country are growing faster than the economy generally. While the cost of everything is rising, the cost of medical care is rising significantly more rapidly. And, that will affect our ability to spend on a variety of other matters. Why are medical costs so high and rising so consistently?
This hyperinflation is not solely isolated to medicine. There is also evidence of rapid growth in post-secondary education in America. Recently, in Risks for Attorneys (June 2019), a report from the Virginia State Bar Special Committee on Lawyer Well-Being was surveyed. It noted that "in 1985, the average annual tuition in private law schools and public law schools was $7,526 and $2,006." Had those increased commensurate with inflation since then, in 2018 the costs "should have been $17,520 and $4,670." That is, they should have each increased 232% over that 33 years.
Instead of $17,520, private school tuition in 2018 was $47,754. That is over 634%. That may seem a bargain compared to the $27,160 for public schools, which is over 1,353%. Money magazine blames the increases in costs on government. It asserts that "the government no longer carries its fair share of college costs." An interesting position; it seems easy to simply blame government for our woes. The author of that article urges better record keeping so that students can be better counseled regarding debt. In other words, more information and education for making better consumer decisions.
After writing Medical Charges and Challenges (June 2019) and Risks for Attorneys (June 2019), two news articles came to my attention. In May, Forbes reported that the federal government may soon "make it easier for patients and employers to comparison shop for healthcare." This is purported to come through an executive order that "would mandate disclosure of prices throughout the healthcare industry." Forbes describes the world of healthcare pricing as less-than-transparent, calling it "murky."
Forbes lauds two legislative actions signed into law in 2018 which it says started us down a path to greater transparency, and led to this executive order. Forbes claimed that before these statutes, pharmacies were precluded from telling a patient that their prescription medicine would be cheaper if they paid cash than it would be under their health insurance. Presumably, this would be medications whose price is less than a patient's co-pay. Someone was keeping information away from the consumer, the person paying in the economic exchange?
Forbes also notes that since January 2019, hospitals have been required "to post lists of prices of services and technologies online." Despite the requirement, Forbes concedes that there has as yet been little enforcement of this requirement. Furthermore, the information that is posted is "identified in acronyms, abbreviations, billing codes, and medical terminology that most consumers can't be expected to understand." Thus, there appears some compliance with the letter of the law and an avoidance of the spirit?
Forbes cites Kaiser Health News on the concept of posting pricing information, detailed in a March 8, 2019 article. It asserts that "most hospitals appear to be complying with the rule." But, the information is not prominent on websites. And, the information is difficult for the average consumer to interpret or decipher. The question is whether the transparency is effective or merely present. Posting information is not that helpful if consumers cannot interpret or comprehend it.
The second article that hit my news feed almost simultaneously comes from Foxbusinessc.com, regarding "unexpected medical bills." The theme is that despite having good health insurance, Americans are being surprised with "surprise bills, and often threatened by bankruptcy," despite that coverage and their efforts to comply with their health insurance carrier's rules. The author contends that insurance companies and medical providers are "wrangling," and that their efforts or struggles with each other "often leaves patients holding the bill." See Confusions and Disconnects in Medicine (July 2018).
Essentially, patients are presenting for care with a provider or at a facility that is "in their network," only to have care or interpretation (testing) performed by someone who is not "in their network." When those services are billed, the insurance company is not covering the out-of-network cost, and the patient is being billed for the "often outrageously high" cost.
Fox Business contends that this is occurring in about "20% of inpatient emergency department cases." After some portion is paid by the health insurer, the physician or facility then bills the patient for the remainder. The author notes that receipt of such a bill may be stressful, but that there is also the additional "threat of being turned over to a collection agency."
Nationally, there is a discussion of somehow solving the resulting consumer dilemma. As yet, however, there is no such national or universal solution. But, Fox Business says that "some 20 states have established various forms of consumer protections." The article concludes with the sentiment that "comprehensive solutions" are needed "that address the excessive costs of the broken U.S. healthcare system."
What do all of these examples have in common? Transparency. And, transparency that is full and clear. Providing information that is in abbreviations or professional codes will not benefit the average consumer. Doctors make referrals to other providers or testing facilities, and consumers need to be able to easily determine whether those recommendations are appropriate, or whether some alternative provider may be equally efficacious and more affordable as an "in-network" alternative. That may be practical today with a phone call to either the health insurer or the referred-to provider.
Such a call might solve the "out-of-network" provider issue, and the surprise medical bill. But, such a call is unlikely to be an option when those services are provided in an urgent care or even emergency situation. When the patient is battered and bloody in the emergency room following a vehicle collision, she or he is not in the state of mind to check the credentials and the financial details of the various providers that render services. Thus, it appears likely that the most vulnerable of patients are least able to be an informed consumer.
When the non-emergent consumer is afforded transparency, she or he may elect to make informed economic decisions about care. Knowing that one facility charges twice as much as another for a particular service might influence a consumer's decision. But, it is likely that those with health care coverage will be concerned only with their own economics. That is, "What is my copay." Generally, the economics of facility selection may only be of interest to a patient who will have a personal financial interest. Otherwise, transparency regarding cost may be of more import to the health insurer in selecting "partners" than to patients making choices.
What information would be of interest to all patients? Perhaps a patient would be interested in transparency regarding how many surgical patients at a facility required readmission within some period following discharge? Perhaps consumers would be interested in how many patients at a particular facility required wound care that was beyond some level deemed to be "normal" or expected? Perhaps the volume of a facility's patients that suffered secondary issues such as infection would be of interest?
In the end, requiring the publication of such data might be helpful to consumers. But, if required would such information be understandable to the consumer? Would it be prominent and accessible, or hidden in the depths of a website? Could it be manipulated like the emergency room "wait times" being advertised on billboards around the country (the minimal times listed allegedly refer to how long you will wait for someone there to speak to you, not how long you will wait to actually receive care).
This all illustrates a struggle with the availability of information and our willingness as consumers to use it. It illustrates that despite our desire to use it, we may lack the knowledge. And, it illustrates that America seems to remain focused on the cost of medical care rather than the quality and effectiveness. Providing clear and transparent information regarding cost may be of little assistance without the information about the effect.
In the end, there is much in medicine about which to complain. There are market forces at work that consumers do not understand, secrecy, and reluctance to change. Will American consumers demand more and better?
