‘Hide and seek’ health pricing has to stop
Friday, March 09, 2018
When a patient walks into a pharmacy with a new prescription in hand, something radical happens in the field of healthcare: They hear the price.
How that price was arrived at isn't always crystal clear. Sometimes a deductible is included. Sometimes they are paying a percentage of the contracted price. There are even times when their copay includes a PBM clawback (which even the pharmacy may not know).
But they do know their price for the prescription.
Knowing the price allows patients (who are also consumers) to make choices about their care. This seems reasonable and logical. It is the way virtually every other purchase is made in our country. For years hospitals and physicians have chosen (and been allowed) to operate their business under a different model.
But maybe not for long.
Alex Azar, the secretary of the U.S. Health and Human Services Department, has gone public with a radically new idea: Tell people the costs.
"You ought to have the right to know what a healthcare service will cost — and what it will really cost — before you get that service," he said at a conference of health insurance executives, as reported in The New York Times.
The idea of cost disclosure isn't new or surprising. What is surprising is just how long our medical model has been allowed to function while playing "hide and seek" with the costs of health services and procedures.
If we ever want to get our spending on healthcare under control in this country, this system has to be changed. We must stop playing games with pricing.
"Putting the healthcare consumer in charge, letting them determine value, is a radical reorientation from the way that American healthcare has worked in the past century," Azar said, adding that this reorientation might require "some degree of federal intervention" to force the matter.
I don't understand why health plans can't just make price disclosure a participation requirement for providers. However, that would oblige insurers to commit to a "covered" status of a test or procedure and limit their ability to deny claims after treatment — something they are especially good at.
Every healthcare consumer in the U.S. knows how frustrating this is. Recently, my wife needed to get a simple TB test for a job. She called the doctor's office to ask the price. They couldn't tell her. She called the lab. No luck. She even tried getting the price from a local walk-in clinic. Nobody could tell her what her out-of-pocket cost would be.
Of course, if you can't get the price from any provider, you certainly can't compare prices and shop around. Making an appointment, getting a test or an elective procedure is almost like pulling the handle on a slot machine today — except that when gambling at least you know what it will cost you.
Unfortunately, Azar didn't have all of his facts just right. He suggested that pharmacies, like medical doctors, couldn't tell patients "the real price" they would pay. That is simply untrue.
We might not be able to tell patients exactly how that copay was determined, but this is a fault of the PBM, not the pharmacy. I would suggest that the PBM should send a "full-price disclosure" to the pharmacy for each patient prescription processed, including any rebates they (the PBM) are going to receive to help cover their cost of the medication. But that may be too much transparency to hope for.
Something has to change so that our national spending on healthcare gets back in line with other similar countries around the world. We are simply overconsuming on healthcare products, and are not necessarily getting any healthier for it.
I'm not a fan of the rationing of care models that result from single-payer systems. But I think full cost disclosure — even to those who have all their services covered by their plan — will bring some common sense back into our choices.
Other government officials have the same concerns as Azar. For example, at the same conference, Dr. Scott Gottlieb of the FDA commented on the "complexity and opacity" of the pricing schemes currently used in our health system.
I call it the "hide and seek" pricing plan. And if we want to fix our healthcare spending, we need to stop playing this game.
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