That’s exactly what you’re doing when you purchase any healthcare service. It’s the only thing that we purchase in this Country without knowing the price.
If you went to an auto dealer and picked out a car from the show room or the lot with no price tag, and told the dealer “I want that red one.” Then the dealer says here are the keys, will send you a bill in the next couple of months.” That’s the way were buying healthcare today.
No one would purchase a car without knowing the price. No one would purchase food, clothing, a home or anything else without knowing the price or cost. Everything we purchase on a daily basis has a price tag. Why is healthcare different?
Recently Federal law has required medical providers to publish their rates and prices. Very few have done so and those that have, have made it next to impossible to interpret what the prices are. In addition, if you were to go in the hospital you never know what tests, services, procedures etc. are going to occur so how would you know the price? For those providers that have not published their rates, they probably have no intention to do so because the fines and penalties are minimal. They would rather not publish their rates to the public.
I have access to hospital inpatient and outpatient charges through the American Hospital Directory. It’s a national database which shows an abundance of financial information for hospitals. You would be quite surprised at the elevated and egregious pricing that hospitals charge. No wonder they don’t want to publish them!
It doesn’t matter whether your health plan is fully insured or self-funded, bundled with an insurance company or unbundled with a TPA, if you’re with BUCA or some other PPO, you will never know what the prices are in advance. Exception: some providers in the last couple of years have published their imaging rates, but once again you may not know which picture is going to be taken.
If you don’t want to go blind into a healthcare provider with a blank check, there are alternatives and solutions but they cannot be a discount off of billed charges (PPO) – because you never know what the charges are. Some PPOs tout big discounts but they’re quite insignificant if the charges keep going up and the discounts remain the same. Funny money! Smoke and mirrors!
There’s only two ways that any member or Plan Fiduciary can know the prices in advance. First, would be a direct contract with a provider that spells out exact pricing for procedures either on a Per Diem basis, DRG, or some other exact basis. Second, would be on either a Medicare plus basis, or Cost plus basis. Medicare reimbursement rates and cost basis rates are published so they are easy to determine. Medicare plus or Cost plus are usually referred to as Reference Based Pricing (RBP) – simply using a reference point with which to base the pricing a reimbursement, rather than some arbitrary “discount off of what.”
If you’d like to learn more about direct contracting for your company or RBP, I am your resource for that. All of our clients utilize both methods to control costs – to the extent of saving more than 30% below an insurance company and their PPO. You can reach me at [email protected] or call me at 970 – 349 – 7707 to learn more.
