Comments on: That’s A Health Care Cost Shift!!!

By: sean grady

sean grady — Fri, 14 Dec 2007 20:56:32 +0000

Charlie - For a physician in eastern Massachusetts there is even cost shifting at the health plan level. Tufts, HPHC and BCBS control the private plan market and the fees these plans pay to a physician can vary by large amounts. For example a PCP could see a patient from each of these three plans, bill a 99213 office code for the visit and despite delivering the same level of patient care they will receive different reimbursements from each plan that can vary by huge amounts. The physician’s office is being financially supported more by the higher paying plan than the lower paying ones. Further, if that PCP happens to be in Partners they will get an even higher reimbursement than the PCP across the street who may be part of another healthcare network. Let’s face it, until we have total transparency on what health plans pay physicians and hospitals (and what quality outcomes result from these physicians and hospitals) there is not enough information out there for consumers to make smart decisions and to level the playing field for providers who right now can get paid much higher rates even if they deliver lower levels of quality… a fact that was made clear by how local networks scored on the recent Mass Health Quality Partners “Statewide Comparitive Clinical Quality Report”. Networks that receive higher payments scored no better (or even worse on some quality measures) than other networks making one wonder why are they getting paid much higher rates for average or below average care?

By: A Doc

A Doc — Thu, 13 Dec 2007 17:59:08 +0000

Clearly, teaching hospitals are less efficient and more costly in the provision of care. It is a reality we accept to ensure good healthcare in our future and for our children. In an ideal world the amount of care provided by teaching hospitals on a state by state basis would roughly provide the number of physicians needed to sustain adequate turnover in that state. As you point out, healthcare is in many ways a state problem; hence, if a particular state shoulders a disproportionate amount of teaching, it susidizes the rest of the US. This is clearly the case in Massachusetts. In effect we are “cost shifting” the cost of training and research away from other states and to Massacusetts. This seems a noble yet fiscally unfair situation.

By: Charlie Baker

Charlie Baker — Wed, 12 Dec 2007 22:36:25 +0000

Barry - agree with you, but don’t know how to stop the public/private gaming you reference. I do think public reporting on payment would bring this issue to the surface - and force some kind of discussion about it, though.

By: Barry Carol

Barry Carol — Wed, 12 Dec 2007 20:20:47 +0000

Charlie,

I think some cost shifts are good and others are not so good. An individual who buys insurance at a price that properly reflects the claims risk inherent in his underwriting group is good. So is pricing that drives drug demand toward generics. So are non-refundable cheap airfares that allow airlines to practice yield management. All three of these, in the end, result in more efficient resource allocation. People don’t generally buy insurance expecting to collect more in benefits than they pay in premiums each year. Generic drugs save people money, while buyers of non-refundable airline tickets trade reduced travel flexibility for a lower price.

By contrast, when Medicare and Medicaid pay providers less than the full cost of healthcare services in the expectation that providers will make up the difference by charging private payers more, costs are imposed on the private sector without a Congressional vote to do so, without improving the efficiency of resource allocation and without giving anyone a choice in the matter including allowing Medicare beneficiaries to use their own money to insure that providers are paid enough to be willing to see them on a timely basis.

Price and quality transparency within the healthcare sector is between non-existent and woefully inadequate, but that is a whole separate discussion.

By: Charlie Baker

Charlie Baker — Wed, 12 Dec 2007 20:05:17 +0000

Kitty - First of all, thanks for writing. All thoughtful comments are appreciated. But I wouldn’t call it a shell game. Some costs are funded by premiums - paid by employers, taxpayers, and individuals - and some costs are funded by patients/users of the service. By itself, this is no different than the way it works for many, many other goods and services - home mortgages, heating oil, groceries, college educations - the list goes on and on.

I guess what makes health care different is the fact that most people would like it to be “free” - because it’s health care (and not something less important) - and the total cost keeps going up. It’s never going to be free - and it’s not free in other countries, either (see my blogs on my recent conversations with people from the UK). Someone’s paying somewhere for all of it.

I share your frustration over the rising price - and agree with you that it’s not sustainable. That’s why I’ve been so aggressive about promoting more public information on cost and quality. In the absence of good, publicly available information on cost and quality, we’ll end up with some other kind of “blunt instrument” approach to deal with rising costs. I’d prefer to avoid that.

By: Kitty

Kitty — Tue, 11 Dec 2007 23:06:42 +0000

So it’s a shell game - the cost shifts from employer to employee or person to person, or you choose the generic instead of the brand name, but even generic copays increase and the costs of healthcare overall continue to rise - mostly to the consumer at a rate that is far greater than their cost of living increases and once again it’s the middle income people who are getting squeezed hardest…. so when does something actually happen to reduce the costs or, at the very least hold it steady?

It seems that the cost shifts can only be a temporary solution to the problem before people start losing more than they can afford in order to cover their health care costs.