Looking under the rug – what insurers pay providers now public in Minnesota
For the first time in the U.S., a web site will show consumers what insurance companies pay on average for common medical procedures. That, according to an article in this morning’s Star Tribune, titled “Medical price shopping hits Web.” (Bad headline aside – medical price shopping has been around on the web for a couple of years – this is different).
The tool, found at www.mnhealthscores.org, was developed by the MN Community Measurement, “a collaborative of state health care providers that collected the data from insurance companies,” according to the story. More than 110 providers throughout Minnesota provided insurance reimbursement data on 103 medical procedures, and not surprisingly, there is a wide variety of costs. For example, the article leads off with the comparison of colonoscopies, which would cost $1,354 at Olmsted Medical Center in Rochester (not affiliated with the Mayo Clinic, btw), and $402 at Hennepin County Medical Center in Minneapolis.
Of course, it’s not until after the jump on page A10 that it is stated that these aren’t actually prices consumers will pay, but rather the average negotiated reimbursement that insurers pay providers. What patients would actually pay for those colonoscopies would depend on their insurer, plan and specific components such as copy, deductible, etc. Still, this is helpful information for someone like me, who has a high deductible plan for my kids. Or, who – as noted in previous posts – is battling a stubborn wart on his foot (“Removal of small wart: Olmsted Medical Center – $216; Broadway Medical Center, Alexandria, $130).
Information like this usually leads to more questions than answers, and this tool is no exception (my first attempt to use it this morning has me still waiting for the site to load procedures to compare). Why is Olmsted more expensive than Hennepin County Medical Center? Are there valid reasons, related to experience, convenience, quality of care, etc.? But there’s no doubt if this information becomes comprehensive (covering more providers and procedures) and is simple to use, it will be a useful tool for those shopping for care.
On a side note, our White House-seeking Governor, Tim Pawlenty, jumped on board fast, lauding the tool as an example of why we should have a “consumer-driven model, not a government-centric model.” The expressed hope is that transparency of costs at this level will help foster price competition among providers, driving down healthcare costs overall. (Political editorial alert: I’m growing tired of the old free-market mantra – “let the consumers run healthcare.” Sorry, but consumers for the most part don’t drive demand in healthcare, providers do, and that’s a bigger problem (i.e. fee-for-service). Frankly, unless we all receive our medical degrees, we’ll never have the expertise to be in the driver’s seat. But off my soapbox.)
Politics aside, what do you think of this new tool? Will it be a game changer, or just one more resource among dozens that, while seeking to help consumers, may end up causing more confusion than ever? Tell us what you think.
Chris,
I came across the Star’s Tribune article this morning too and visited mnhealthscores.org site. I had a similar experience and questions after using the site. The site wasn’t as intuitive as I was hoping. Not only did it not load properly, the data was difficult to interpret and difficult to put into perspective as you described.
I think this is a step in the right direction. As I practice manager, I’d be delighted to share our fee schedule assuming we’d get paid at the time of service. And in fact, I often do with our self pay patients.
The problem I see with this initiative is that mnhealthscores’ database uses insurance reimbursement rates. The fact is that insurance reimbursement rates are completely illogical. In our practice we have people that work for the same company, with the same health insurance plan, and we still get reimbursed differently on the same CPT codes. Why? Who knows.
Anybody in the health care industry will tell you that insurance reimbursement rates are virtually undecipherable. The fact that one carrier reimburses $100 and another $75 for the same procedure does not mean anything really. And you’ll be hard pressed to find a reasonable explanation from an insurance carrier as to why the difference.
Even Medicare reimburses differently (https://catalog.ama-assn.org/Catalog/cpt/cpt_search.jsp). Put in a 99213 and look at the discrepancy in pricing from region to region. You can argue that it cost more or less to provide services in different areas of the country due to cost of living or overhead cost, but the complexity of the doctor’s decision making, expertise and advise (which is in fact what you are paying for) ought not to vary from region to region. In other words, managing a diabetic patient is not more or less complex depending on the region.
Again, I think this is a step in the right direction. If anything, it prompts people to ask all these questions. And the questions – in my mind – ought to be directed at insurance companies, not medical providers.
I order for an initiative like this to truly have value and have the implicit transparency mnhealthscores.org is trying to achieve, I think the insurance reimbursement rates have to be removed from the equation and a more pertinent question should be asked to providers.
If you (the provider) doesn’t have to deal with the complexities of the insurance companies, how much would you charge me for procedure or service XYZ?
Until the consumers/patients have their skin in the game, we will not see the reform needed to overhaul our health care system.
@PediatricInc
P.S. I enjoy the podcast you guys do at Interval. Keep up the good work.
Brandon – you hit the nail on the head (better than I did with my opaque “looking under the rug” reference) in that how reimbursement rates are set is a mystery to so many players in this game. My hope for something like this would be that, just as you say, consumers start looking at the almost random reimb. data and start saying “What in the world is going on here?” A huge part of this is how providers negotiate with payers – theoretically, the bigger, more powerful you are, the better the reimb. There is some logic to that, but it doesn’t explain everything, and not sure it’s the best way to set rates that affect so much.
As you undoubtedly noted in my post, I’m not as convinced as you that patients having more skin in the game is the silver bullet (or even a regular bullet). I have a $6k deductible for my kids, but that would still have little impact on the care my son received last year when he broke his arm. How in the world am I going to question the imaging, labs and surgical procedures my ortho doc was recommending? Having my skin in the game helps, but I don’t believe it’s truly a game changer. I would imagine that many in the public would consider $6k worth of skin scary, yet it’s not truly changing the game in my case. (Would be fun to battle that one out over a beer sometime.)
Thanks a ton as always for posting. Will be interesting to watch how this hits and others react.