Transparency of pricing data is needed for consumers of healthcare to make rational choices.
Today that data is hard to come by. But a bill being sponsored by Senators Charles Grasley (R-IA) and Ron Wyden (D-OR) proposes to publicly share the purchasing data of the nation's largest purchaser of healthcare: Medicare.
Give the Public Access to the Medicare Database
"For no compelling reason, a commanding tool for trying to contain health care costs is lying unused. That sidelined powerhouse is the Medicare claims database, which holds a record of all payments from taxpayers to physicians and other providers for seniors’ health care."
"If bipartisan legislation now before the Senate becomes law, this information would be made available to all Americans through a free, searchable online database. It would instantly position Americans to secure more value for the $2.7 trillion being spent this year on health services. That’s because the publication of the Medicare data will become health care’s new financial baseline; the measure of what America’s largest and most powerful buyer of health care gets for nearly $600 billion a year."
Because US healthcare has been paid through intermediaries for the last 50 years, consumers have little sense of healthcare prices and there is virtually NO relationship remaining between cost and price in healthcare. This isn't due to doctors and hospitals gouging the public, but simply rational people working within an irrational, Rube Goldberg-type system.
Some healthcare providers may oppose this bill. But the only innovations that have actually WORKED to reduce healthcare spending have involved individual consumers having "skin in the game" and making rational economic choices for their own care. To do so, consumers need price data.
The MEDPAR data base is the most complete database out there. If it were opened to the public, there would be a surge in data-mining firms that would slice and dice it for easy consumer consumption.
Medicare is already the baseline against which health plans and providers negotiate managed care contracts. The fact is that hospitals and physicians lose money on Medicaid and often times on Medicare - - they make up those losses by negotiating better-than-Medicare rates on their commercial insurance contracts. But all those are on the decline, inexorably headed for parity with Medicare.
The uninsured/self-pay patient is paying the "rack rate" unless he negotiates a discount in exchange for cash payment -- typically 40% discounts are avaiable for prompt payment. Having access to Medicare price data would introduce significant negotiating information for consumers.
We find ourselves in a transitional chasm between two worlds: the Old World of fee for service based healthcare paid through intermediaries and the brave New World of capitated, value based health care. But it is not clear that the Old World will go away entirely with everyone buying insurance through exchanges (or defaulting to a single payer system.) If individuals are to retain their ability to negotiate their own purchases for healthcare, the MEDPAR database could be a powerful tool in their hands.
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