Who Really Sees the Medical Bill?

Who Really Sees the Medical Bill?
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When it comes to healthcare billing, we all could use a little "cost education." Trying to understand the nuances of medical billings in today's modern health system is nothing short of daunting - for anyone who "touches" the numbers, including care recipients and care givers.

.... Daunting for practitioners and administrators who need to understand and sort through increasingly complex protocols.

.... Daunting for patients who are dependent on the medical field's mandate for services (if they want to treat necessary conditions and maintain positive health).

.... And, daunting, ultimately, for general consumers and the American taxpayer who have to foot the bill for healthcare excesses that are spiraling out of control and draining the "system."

All concerned would likely agree that they need a level of insight akin to a Rosetta Stone to decipher the intricacies of medical care pricing.

The patient is particularly vulnerable, of course, because, as a lay person unfamiliar with the details of medical techniques and procedures, they are have no relative barometer for assessing or evaluating the costs they're handed for physician visits and hospital stays. In every other aspect of our free economy, we have the opportunity to price shop - to compare cost A and to cost B to select and derive the best value. But in an industry that is lacking any form of price transparency, we are belittled in the face of a mysterious, behemoth billing infrastructure that we can't begin to understand.

It's ironic that we have weekly circulars that allow us to compare the cost of safety razors, paper clips and ink pens, but when it comes to our nation's health - the well-being of our families and our children - we're in a fog. As Harvard Business School professor Regina Herzlinger said, "We know the price of everything we buy, but when we need something that's really important, we're clueless."

This is less problematic for the 85 percent of Americans who have adequate health insurance, typically through an employer. But it presents a huge, unanswered dilemma for the remaining 50 million citizens who are uninsured, or who are self-employed, retired, or work for businesses that don't offer coverage. These individuals, if they do have any form of medical insurance, often grapple with a high deductible that is impractical and basically renders them without medical air cover, except in the event of catastrophic illnesses.

This segment of the population, along with those who are just plain uninsured, are left at the mercy of unexplained medical bills, with no ability to assess the often enormous charges for the services they receive. At the best, they're in the dark; at the worst, they are victims of unscrupulous practices, including fee schedules where doctors charge different fees to different patients; unexplained "write ups;" and an insurance industry that has no competitive interest in sharing their cost formula.

But physicians themselves are also lost in the mire of unexplained pricing - and, in some cases, they are as victimized as their patients. They too are impacted by a broader billing and medical compensation infrastructure that they don't really understand and upon which they are totally dependent. Doctors are required - whether they like it or not - to manage a complex, insurance protocol-dominated matrix of charges, assessments, and reimbursement qualifications. If they are to remain profitable, they must decode the puzzle in a way that allows them to adhere to successful margins and a functional financial bottom-line.

It's the insurance industry (and the need for accompanying regulation within this body) that clearly holds the key to change - if insurers were to move toward a model that offered true price comparison. However, it seems highly unlikely that this powerful and politicized group of companies will take the first step. From their perspective, why should they? After all, the system is working just fine, right? The most vulnerable move for an insurance company would be to reveal an advantageous price (especially for a highly sought after procedure such as CT scan) to a competitive entity so that competitor can turn around and mimic the offering. As Gary Claxton, director of the Health Care Marketplace Project at the Kaiser Family Foundation, explains: "If you are an insurer that thinks you have good deals with providers, you don't want your competitors to know what those deals are."

But it's this approach that is absolutely essential in a model of true model of price openness. At the end of the day, its basic high school economics: Without consumer awareness of costs, you can't have competition. Without competition, market pricing will remain elevated.

Making the current healthcare cost environment even more complex is the fact that currently each insurance carrier has its own pay rules. A particular medical procedure can elicit one price from one carrier - and a completely different price from another carrier for the identical procedure. This reality is disconcerting to patients and physicians alike - and it is no surprise that skepticism and cynicism over healthcare costs have reached an all-time high.

It remains to be seen what impact healthcare reform will have on healing these ills. Unfortunately, Obamacare's mission to reduce costs and improve efficacy is targeted more at comparative effectiveness research - i.e., the attempt to reduce costs by looking at the most effective strategic and clinical treatments based on statistics-based methodologies. The move toward price transparency is not a central mission of reform. Notwithstanding, it should be and there are other steps both doctors and patients can take to maintain price control and eliminate unnecessary overspending and overpaying. Doctors should be able to confidently dialog with their patients about these issues (be it in person or through appropriate online forums) - and find proactive ways to assuage the impact of the current "crisis of price" in the medical field.

But, until the system undergoes a radical transformation - change that must ultimately occur from the inside out - the best and greatest opportunity for empowerment is for patients to channel as much knowledge as they possibly can to make informed decisions. It is absolutely essential that patients have a good layman's knowledge of the care they're seeking - and utilize credible online resources such as Avvo.com to understand the credentials and professional record of the doctors they choose in the first place. Avvo allows prospective patients to responsibly vet a doctor's credentials, reputation, background and performance record so they know what kind of care they're receiving. Understanding this piece of the puzzle is a start to understanding and gaining control over the bigger issues. As Hannah Clark at Forbes explains, if a "lower cost" doctor takes three times longer to diagnose and treat an ailment, then he's more expensive than the higher priced doctor who can do it in a fraction of the time.

Together, doctors and patients can and should build a more open and honest dialog about this critical issue. And while Americans need to say a collective pray that this next generation of health administration will result in measurable savings for us all, let's put our faith, not in our national leaders, but in the power of information currently available through myriad online and public resources to help us make sense of what we're paying for - and in this way, take one small step toward debunking the conundrum surrounding healthcare costs. It's a place to start.

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