The one thing that’s been hurting patients, creating friction with the healthcare industry, is cost. Procedures vary in costs throughout hospitals and while quality is not necessarily a variant, the cost can be a crippling problem. The patient often times ends up equating cost with higher quality while the nature of a procedure is not a variant. An MRI, CT Scan, and other procedures could be thousands of dollars apart in cost depending on who the provider is. A recent article in bloomberg.com stated that “In May the US Medicaid program released data for the first time on what it pays 3,000 hospitals, and the numbers showed the rates it pays for the same procedures can vary by thousands of dollars, even within the same city.”
There are pension funds and health insurers that are taking a hard line against rising medical costs in light of this new data. The cost capping helps, especially when there is no real difference in outcome between one provider that may charge twice as another, competing, provider. A California pension provider, known as Calpers, became involved in a pilot program with Well Point after a Well Point analysis found that costs for hip and knee replacement surgeries can vary from 15,000 to 110,000 dollars depending on who the provider is.
This type of initiative doesn’t cover just a few specialties, it covers healthcare as a whole. Diagnostic imaging procedures such as an MRIs and CT Scans are being put in comparative pricing charts by grocery giant Kroger Co. This particular employer is employing the tactic of comparing procedure costs in 10 states. The purpose is not to limit the insured, but to help them make a cost-conscious choice that will not sacrifice quality and still give the patient the ability to receive proper medical care.
This pilot program that Well Point engaged in resulted in a cut of 19% of costs by placing a cap on the price of some surgeries. The savings in California have totaled well over 5 million dollars and so far there has been no sign that health has been compromised. In an article published by The New York Times, it was stated that the cost caps and comparative cost choices were not a limit to the amount of service providers that patients had access to.
This type of stance against rising costs is a positive sign that the health care debate will see a turn in favor of the patient. While this is likely to find a lot of heavy opposition as it eventually makes its way to more states, chances are that people will see it as a positive sign. Time will tell what will be the ultimate outcome in the healthcare costs fight but until then it will be interesting to see what happens.