Transparent medical pricing lowers health costs

My friend, the Buckeye Surgeon, has resisted reforms in medical residency training programs, that have eased some of the inhumane exhaustion on young interns and residents.

I have a different view on the subject. This issue generates spirited debate in the blogosphere and in teaching hospitals across the country.

Not all medical education reforms, however, provoke controversy. I learned recently from an Ohio medical student that they are now being taught about the financial costs of medical tests and treatments. This makes so much sense that I am astonished it has taken so many decades to be incorporated into medical training. Indeed, even practicing physicians like me are often clueless about the costs of the tests we recommend.

A commentary in the New England Journal of Medicine chastised medical educators and training programs for not practicing or teaching cost consciousness to physicians-in-training.

A challenging aspect of this issue that medical pricing is fluid and incomprehensible. Churchill’s aphorism describing Russia applies perfectly to medical costs: “It is a riddle wrapped in a mystery inside an enigma.”

There is no fixed price for a medical item, as we expect when we purchase a gallon of milk at the grocery store. For example, when I spend a morning performing half a dozen colonoscopies on 6 lucky individuals, the reimbursement for each procedure may be different.

While I am not an economist, this seems rather odd. If 6 patrons order the same entrée at the same restaurant, their bills will be identical. Not so, in the medical world, which has a cost system so abstruse that we need CIA codebreakers and cryptographers to decipher it.

As an aside, when I receive my own medical bills, I need an insurance company Rosetta Stone to decode them; and I am in the medical business. Unraveling these insurance company documents tests the wits of our most seasoned patients who must be steeled for hours of dogged inquiry to capture a windfall refund of $4.86. However, recovering even a trivial sum is a sweet victory.

A few years ago, in my own community hospital, we were provided with a running total of medical charges accrued for each patient. The financial charges were stratospheric, for even brief hospital stays. I was surprised that the administration shared this data with us, and I wondered if the disclosure was inadvertent. This speculation was supported when the data disappeared from our computer screens without warning, and has never reappeared. We lost a tool that could have helped us to practice medicine more judiciously. If we were reminded of the cost of a CAT scan, at the moment when we casually ordered it, perhaps, we would pause and consider relying on the scan from 2 months ago, which was performed for the same reason.

My hometown newspaper published an article that informed how to comparison shop by price for medical care, not an easy task. When my own patients ask me for the cost of my procedures, I can’t give a straight answer to this seemingly innocuous inquiry, which they find puzzling. Each insurance carrier uses its own pricing playbook. And, if I take a biopsy, additional charges will materialize.

The medical marketplace is a unique universe. The patient receives a medical service, has no idea of its cost and likely isn’t paying for it. Any wonder why medical costs are breaking their own records?

Paradoxically, communities that spend more on health care may have inferior medical quality, as shown in the Dartmouth Atlas of Health Care. While I don’t advocate denying medical care because of cost per se, it should be a consideration when medical options are being considered. This is of critical relevance to individual and public health.

For example, a flu shot may be medically indicated, but if it cost $250, and isn’t covered by insurance, would we roll up our sleeves? Costs matter.

Medical pricing should be simplified, accessible and transparent. Physicians should be aware of how many health care dollars we are burning up. More importantly, patients should have this knowledge also. If they had ‘skin in the game’, and were more financially responsible for their care, this would go far to reform a health care system where mysterious and enigmatic costs, like our politicians’ hot air, have nowhere to go but up.

Michael Kirsch is a gastroenterologist who blogs at MD Whistleblower.

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