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Hospital Pricing Data Dump Won't Hurt You, Yet

Philip Betbeze, for HealthLeaders Media, May 17, 2013

Never mind that consumers are the last group hospitals should worry about comparing their prices, but over time, says Moody's, greater threats will come from payers, employers, and yes, Washington, DC. For this time period, the credit rating firm is more concerned along these lines:

"First, it's conceivable that a hospital system may adopt price transparency as a marketing strategy. Such a strategy would appeal to large self-insured employers and price sensitive consumers (ie: those with high deductibles or co-insurance rates) shopping for discrete, non-emergent healthcare services such as hip or knee replacement, bariatric surgery, elective heart surgery and other procedures.

This strategy could be national in scope and would not need to be limited to a single market or region. There are already examples of domestic medical tourism whereby a hospital provides a discrete set of services for a flat fee. In some cases, the hospital also offers a quality guarantee." (italics are mine, because I'll have a story out about this in the July issue of HealthLeaders magazine, so stay tuned.)

Also from the Moody's analysis:

"Second, the data could also be used by third parties advocating for change among hospital pricing and billing practices. The cost of healthcare services is receiving significant media attention and is the subject of intense political debate in Washington DC as federal healthcare spending on Medicare and Medicaid are significant drivers of the federal deficit. California already requires hospitals to disclose data on charges (similar to what CMS has published) and similar requirements are under consideration in other states including Maine and North Carolina.

Massachusetts enacted legislation to limit the growth in healthcare costs to state GDP, and numerous states have rejected insurance premium increases deemed excessive. Although none of these actions is individually responsible for a slowdown in healthcare cost, collectively they point to the significant attention policymakers are giving to the issue of healthcare costs.

It is conceivable that states will require additional disclosure on actual prices paid, inviting greater regulation of the industry. Such a development would have material impact on hospitals' marketing and billing strategies and would carry negative credit implications for those that are slow to adapt." (emphasis mine)

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1 comments on "Hospital Pricing Data Dump Won't Hurt You, Yet"


Frank Poggio (5/20/2013 at 1:31 PM)
"Stop being a victim", good idea. Now how can we accomplish that? Well lets see, we can't just do a wholesale overhaul of our charge master, that will probably cut our DRG payments in half = bankruyptcy. Or how about a a separate table of charges for private payors (or indigent folks)...Oops can't do that either - Medicare has a class of payor rule, all charges across all payors MUST be the same. How about a nice big fat discount for a private payor? Nope Medicare will not allow unless it's a big payor (like an insurance company). Well here's one – stop treating Medicare/Medicaid patients. Overnight you can make all your charges 'sensible' not have to worry about convoluted government rules. I know, sounds crazy, but I just read where many private docs are doing just that, even some specialty hospitals. In my opinion that's where it all will end up if we (and our government) keep up this insane system. A two class health care system, one for the discount boys, the other for the reasonable charge paying folks. . Frank Poggio The Kelzon Group