The Price Chasm

There are many reasons for our high health care costs.  The actual price charged for care is one of the main culprits.  In her article, “The $2.7 Trillion Medical Bill” Elizabeth Rosenthal of the New York Times,  uses the example of the cost of colonoscopies to illustrate the chasm that exists between the prices charged for medical care in the U.S. and every other country, “even though numerous studies have concluded that Americans do not get better care.”  This is the first in a series of articles Rosenthal has written that dig into the high cost of care.  Other recent articles have focused on the high and vastly differing prices for childbirth, hip replacement surgery and asthma medications.

The problem isn’t just high prices, it is that there is no rhyme or reason to what is charged for a given procedure or service.  Higher priced care is not necessarily better care.  And consumers who want to shop for a better price don’t have the information they need to make an informed decision about either the price or quality of what they are buying.  Right now “shopping” for health care is like buying a car without knowing the sticker price or having the ratings on safety and reliability from Consumer Reports.  This is referred to in the health policy world as a “lack of transparency.”

Furthermore, there can be enormous differences in prices for the same procedure delivered by different providers.  And, because each insurer negotiates its payment schedule with each provider, the same provider gets paid wildly different rates for the same procedure by different insurers.  In the health policy world, this is known as “price variation.”  It is partly this price variation that makes it difficult for a provider to give a price quote to a consumer, should the patient actually try to ask ahead of time what a procedure might cost.

To explore this topic further, plan to attend the October 28 forum organized by Universal Health Care Foundation of Connecticut and our parent organization, CHART, “Drowning in Health Care Costs:  All Hands on Deck” The forum features Steven Brill, author of the ground-breaking Time Magazine article, “Bitter Pill:  Why Medical Bills are Killing Us,”   as well as Patrick Charmel, CEO of Griffin Hospital and State Comptroller Kevin Lembo and is hosted by Quinnipiac University at their Center for Medicine, Nursing and Health Sciences on their North Haven campus.   To register, click here.

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