Lawmakers Weigh Benefit Of Healthcare Price Transparency

Jan 20, 2016
Originally published on January 19, 2016 6:07 pm

Former Senate president Don Gaetz says Medicaid Expansion is a dead issue for the next three to five years.  The Senator says lawmakers are now focused on what he calls second tier healthcare plans.

The Florida legislature is debating ideas to bring down Florida’s healthcare bill—now over $20 billion a year.  Lawmakers are considering several plans. One would lift caps on where and when hospitals can be built, another would expand who can prescribe certain medications. And there’s a big push to require hospitals to post charges on their websites. But Gaetz says while some of the bills, including his own, would expand access and impact quality, state economists aren’t sure they’ll make a dent in cost:

“The point is, your recommendations, just like my bills, will be subject to that objective, non-political analysis. And those will be the cost and savings numbers from the chief economist, that will be taken seriously by the legislature," he told Governor Rick Scott's Hospital and Healthcare Funding Commission Tuesday.

Hospital price transparency is the biggest issue moving forward. But it’s not that simple, says Tallahassee Memorial Hospital CEO Mark O’Bryant.

“Every patient presents differently. People have different levels. Their health is different. It’s a very complicated process, but it’s one I think it’s important for us to have to figure it out. Patients need to be aware of what services they’re receiving and what impact that’s going to have on them.”

The Florida Hospital Association recently unveiled a new website that lists prices of common procedures. But there’s disagreement on whether the site, and the prices posted, are truly reflective of the bills patients can incur. The site gives two price examples—one before and after insurance. That first number is a la carte pricing, and it’s far higher than what insurers pay. Most consumers don’t pay the higher price point.  

“That’s certainly a step in the right direction in terms of improving price transparency. The problem, potentially, when you look at that website it seems to imply consumers are responsible for the difference," said Professor George Nation of Pennsylvania's Lehigh University.

Most people don’t pay the difference in pricing, but Nation says the two different charges serve a purpose.

“It certainly is true that the higher a hospital sets its charge master rates, the higher it’s ultimate reimbursements are likely to be," he said.

He says most of the time, hospitals don’t even know what the price will be. But that the higher prices push up costs overall.  So hospitals tend to use the higher rate as a starting point. Senator Gaetz, a former healthcare executive likens it to the suggested retail price for a car.

“That’s one, over-simplistic way to think about healthcare prices. An ongoing auction in which payers, insurance companies, managed care plans, employers, Medicaid, Medicare are bidding, and negotiating price with providers.” 

Gaetz says he expects a plan requiring hospitals to post costs on their websites and pay fines for overcharging, to pass. But he also says Florida is a long way from its ultimate goal of bringing down costs.

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