HHS Secretary to Create Transparency Mechanisms to Address Medical Billing Costs

Back when TIME published its now classic mainstream longform piece “Bitter Pill”, the buzz in the healthcare blogosphere centered around the waste involved in the final point of delivery of care to the patient. Stories of patient woes as they faced outrageously escalating medical bills for treatments for which they thought they were covered were replete in the report. Today, word comes from the piece’s author, Stephen Brill, that HHS Sec’y Kathleen Sebelius will create yet another office of accountability.

Sebelius will release a data file that shows the list—or ‘chargemaster’—prices by all hospitals across the country for the 100 most common inpatient treatment services in 2011. It then compares those prices with what Medicare actually paid hospitals for the same treatments – which was typically a fraction of the chargemaster prices… In the same announcement, Sebelius is offering $87 million dollars to the states to create what she calls ‘health care data pricing centers.’  The centers will make pricing transparency more local and user friendly than the giant data file she is releasing this morning.

After one reads the TIME article, all of this is placed into perspective, and it is easy to see Sebelius’s response to the ongoing inequity between the price, cost, and service (delivery) of healthcare; but, is creating yet another bureaucratic knee-jerk truly the answer here, especially when it is created to simply track public-private cost differentials? Back when this article was published in February of this year, Brill offered his take on some short term responses by public and private entities alike in addressing this problem. Calling upon hospitals to recoup its profits to improve themselves from within; increasing tax liabilities on profits at ambulatory care centers; and proactive approaches on comparative effectiveness research are just some of the conclusions Brill reaches. He goes on to say

There are two reasons why Sebelius’ release of this newly crunched, massive data file is a great first step. First, it reveals the vast disparity between what hospitals charge for pills, procedures and operations and the real cost of those services, as calculated by Medicare. … The second reason the compilation and release of this data is a big deal is that it demonstrates that … chargemaster prices are wildly inconsistent and seem to have no rationale. … and … the release of … data … should become a tip sheet for reporters in every American city and town, who can now ask hospitals to explain their pricing.

Demonstrating transparency is nothing new for regulatory bodies, including the feds — but the devil is in the details. Providing cold comfort to healthcare consumers serves no purpose unless action occurs to address these startling findings. As reform begins to envelop healthcare access and delivery in this country within the next 12 months and beyond, cogent plans to combat pricing and cost will be needed to demonstrate the real reason for reform — increasing access to quality care at a lower cost while abolishing waste.

08. May 2013 by Michael Douglas, MD, MBA
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