The Trump admin is pushing for regulations that would force hospitals and insurers to publish their negotiated rates for various procedures. Theoretically, this brings additional transparency to healthcare and allows customers to make better decisions about their costs and care. While this sounds good, I don't believe any aspect of this plays out in practice.
The negotiated rate depends at least on both parties: different insurers reimburse different amounts for care. It also depends on the details of the customer's plan. In other words, this negotiated amount might change on a very granular level, and it's not clear that such a value could be reasonably published. Furthermore, the negotiated numbers could change at any time: published rates would need to be kept up-to-date. This is certainly feasible, but it's an enormous list to manage. Consider the combination of the number of procedures, providers, insurers and plans. For a non-trivial procedure, it may not be clear to the customer what codes they will be charged for. In other words, the information is likely hard to parse, limiting its value.
More importantly, the negotiated rate is not what the customer pays. Look at any EOB form, there are 4 line items:
The policy proposes to reveal item 2, but customers should care about item 4. Complicating the relationship is that a patient can have conditions on item 4. For example, most HSA plans have a deductible and out-of-pocket maximum. For example, suppose the following scenario for a knee MRI (taken from personal experience):
Ordinarily, I'd owe $392. However, once I've hit my deductible limit (spent enough out of pocket for the year), I only owe 10% of the negotiated amount: $80.20. And, once I've hit my out-of-pocket maximum (a cap for the year), I owe nothing. All of this resets on January 1st. A published table would not capture any of these dynamics. I'd be on the hook to understand the details of my plan. I fully advocate people understanding such things, but it does make the calculation that much trickier.
So, isn't this better than nothing at all? Maybe. I'm deeply skeptical of anything this administration does, and I think there's a potential nefarious motive. It'd be great if all consumers were well-informed, but this is, has been, and always will be a fantasy (especially with a subject as complex as medicine). Our President knows this as well as anyone; he has made a living scamming anyone he could, and surrounded himself with others who do the same. Suppose I am one of those uninformed people and need a knee MRI. I look up some published costs and find that some other lab is willing to do it for $700, or maybe the lab I that performed mine is willing to give me a 50% discount if I pay cash on the same day. That would bring the cost down to $619.50. What a savings! I choose that option. I ended up coming out worse than if I'd run it through insurance ($0-392, depending on my other details). Not only did I come out worse, my insurance came out better! They got to save $410 while still charging me the same amount for my plan. The provider is the loser in this scenario ... maybe the insurers are better connected with the GOP or Trump.
Even if I navigate a potential procedure correctly and pick the cheapest one, how do I know I'm getting a similar quality of service? The tables would just be for a billed code. Maybe some other lab's MRI is older and yields a worse picture. Maybe a procedure is done by a worse doctor who misses something. There's virtually no way to evaluate these things without being an expert - and almost none of us are experts. Picking providers piecemeal also fragments medical records, preventing the next provider from having a full picture of our medical history, likely resulting in worse overall care. There's even a problem on the purely fiscal front. Choosing an out-of-pocket alternative provider runs the risk of not contributing towards my deductible or cap. I might have saved money on this procedure, but don't get a benefit on the next. Since my next procedure after the MRI was a surgery, I would have just paid that much more of my out-of-pocket there. I would actually come out worse by saving money in the short term! To predict this, I'd have to have enough medical knowledge to predict what procedures might be following.
My inclination is that getting people to focus on the dollar amounts of their care will lead to a lot more Dr. Googling and broadly worse overall care outcomes. As people rely more on skipping insurers, those insurers can better justify offering junk plans that give them profits with less and less risk. The GOP has been misdirecting the public for decades, I think this is another example. Why would Trump suddenly care about people?
The negotiated rate depends at least on both parties: different insurers reimburse different amounts for care. It also depends on the details of the customer's plan. In other words, this negotiated amount might change on a very granular level, and it's not clear that such a value could be reasonably published. Furthermore, the negotiated numbers could change at any time: published rates would need to be kept up-to-date. This is certainly feasible, but it's an enormous list to manage. Consider the combination of the number of procedures, providers, insurers and plans. For a non-trivial procedure, it may not be clear to the customer what codes they will be charged for. In other words, the information is likely hard to parse, limiting its value.
More importantly, the negotiated rate is not what the customer pays. Look at any EOB form, there are 4 line items:
- Total billed by the provider
- Negotiated amount paid to the provider
- Amount covered by insurance
- Patient's out-of-pocket obligation
The policy proposes to reveal item 2, but customers should care about item 4. Complicating the relationship is that a patient can have conditions on item 4. For example, most HSA plans have a deductible and out-of-pocket maximum. For example, suppose the following scenario for a knee MRI (taken from personal experience):
- Total billed = $1239
- Negotiated amount = $802
- Amount covered = $410
- Patient obligation = $392
So, isn't this better than nothing at all? Maybe. I'm deeply skeptical of anything this administration does, and I think there's a potential nefarious motive. It'd be great if all consumers were well-informed, but this is, has been, and always will be a fantasy (especially with a subject as complex as medicine). Our President knows this as well as anyone; he has made a living scamming anyone he could, and surrounded himself with others who do the same. Suppose I am one of those uninformed people and need a knee MRI. I look up some published costs and find that some other lab is willing to do it for $700, or maybe the lab I that performed mine is willing to give me a 50% discount if I pay cash on the same day. That would bring the cost down to $619.50. What a savings! I choose that option. I ended up coming out worse than if I'd run it through insurance ($0-392, depending on my other details). Not only did I come out worse, my insurance came out better! They got to save $410 while still charging me the same amount for my plan. The provider is the loser in this scenario ... maybe the insurers are better connected with the GOP or Trump.
Even if I navigate a potential procedure correctly and pick the cheapest one, how do I know I'm getting a similar quality of service? The tables would just be for a billed code. Maybe some other lab's MRI is older and yields a worse picture. Maybe a procedure is done by a worse doctor who misses something. There's virtually no way to evaluate these things without being an expert - and almost none of us are experts. Picking providers piecemeal also fragments medical records, preventing the next provider from having a full picture of our medical history, likely resulting in worse overall care. There's even a problem on the purely fiscal front. Choosing an out-of-pocket alternative provider runs the risk of not contributing towards my deductible or cap. I might have saved money on this procedure, but don't get a benefit on the next. Since my next procedure after the MRI was a surgery, I would have just paid that much more of my out-of-pocket there. I would actually come out worse by saving money in the short term! To predict this, I'd have to have enough medical knowledge to predict what procedures might be following.
My inclination is that getting people to focus on the dollar amounts of their care will lead to a lot more Dr. Googling and broadly worse overall care outcomes. As people rely more on skipping insurers, those insurers can better justify offering junk plans that give them profits with less and less risk. The GOP has been misdirecting the public for decades, I think this is another example. Why would Trump suddenly care about people?
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