How can we expect to control healthcare spending when the people providing and receiving the service have no information about costs until the bill or payment comes in?
Much is written about how costly healthcare is in the United States relative to other advanced countries. The U.S. Centers for Medicare & Medicaid Services reports that national healthcare expenditures in 2015 accounted for $3.2 trillion in spending, or 17.8% of GDP. America’s healthcare costs are expected to continue to spiral upward at an average annual growth rate of 5.6%.
These numbers are alarming. But what may be even more concerning is that physicians-the people responsible for ordering or delivering the healthcare services that patients consume-typically don’t know how much many of the drugs, tests, referrals or treatments they recommend costs Nor do the patients receiving them. How can we expect to control healthcare spending when the people providing and receiving the service have no information about costs until the bill or payment comes in?
No other industry functions like healthcare when it comes to cost. When you sit down to enjoy a meal at a restaurant, the menu clearly shows what each item costs. A diner knows that the price of a filet mignon is many times that of a hamburger; that is part of her decision when ordering.
Yet when it comes to healthcare, the mentality is, “treat me now, bill me later.” The result: patients are stuck with bills that, whatever their amount, are a surprise.
If we want to curtail the growth of healthcare spending, doctors and patients need insights into the costs of services before they give the green light to delivering or receiving care.
Sounds simple enough, but it isn’t.
Payers have the most data about healthcare costs because payment is their business. But historically they had no motivation to share this information publicly.
Fortunately, price information is gradually becoming more widely available to patients. Medicare patients can see chargemaster prices online for common inpatient procedures. Other websites offer similar information for outpatient fees.
While it would be virtually impossible for a physician to know what each patient is obligated to pay for each service, given the myriad negotiated rates and contracts that exist, doctors can (and should) advance the cause of healthcare cost control. An article in the AMA Journal of Ethics says doctors “have an ethical obligation to ‘do no harm’ by reducing waste and identifying and helping patients who are at risk for financial harm.”
By reducing waste, it ensures all clinical decisions are actually going to make patients better. The move to value-based payment models, which focuses on clinical outcomes, versus traditional fee-for-service compensation, should help propel this philosophy into the mainstream.
Meanwhile, those of us on the technology side can develop ways to present cost and price data in a useful context to physicians, particularly in EHRs and related applications. That will increase both awareness of and sensitivity to cost issues that increasingly may affect patients’ care choices.
Maintaining a system in which there is no cost information available to the parties most intimately involved with the healthcare transaction-patients and physicians-is a non-starter. It provides for no accountability, which is a recipe for continued disaster. It has to change.
Paul Brient is the chief executive officer of PatientKeeper, Inc., a provider of healthcare applications for physicians.