Aug 1, 2014, 4:29 PM, Posted by
Want to know one of health care’s dirty little secrets? While we know how much the country spends on care each year, we have little understanding of what it actually costs to provide care.
Think, for example, about an appendectomy. What does it really “cost” the health care system to perform that procedure? The answer is complex, and of course it includes everyone’s time—from the surgeon to housekeeping staff—and it also includes the drugs, equipment, space, and overhead associated with your stay.
The cost of your visit will also depend on who is delivering your care. A consult with a registered nurse (RN) is less costly to the hospital than one with a physician.
Then, consider insurance. If the price your carrier pays for that RN consult is $85, but the price another carrier pays is only $65, what does it actually cost the hospital—and how do those variances affect what you pay both out-of-pocket and for insurance premiums? Moreover, health care providers are currently not trained to think about the costs of the care they provide—and often have no incentive or means to even consider those costs.
These complexities have made it difficult to reform the way we purchase and pay for health care.
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Sep 6, 2013, 4:30 PM, Posted by
“Pay no attention to the man behind the curtain! The Great and Powerful Oz has spoken!”
In some ways, our health care system has traditionally functioned much like the fantastic land of Oz depicted in one of my favorite movies. Consumers and purchasers are expected to be passive consumers, doing what they are told and paying whatever price is levied based on a high degree of trust and limited information. This model seems increasingly ridiculous. We now face an urgent need to improve the quality and efficiency of our health care system.
But to do that, we need information, a lot of information. Health professionals, purchasers, consumers—basically anyone who comes in contact with health care—need timely, accurate, comprehensive information on cost and quality if they are to make smart decisions. Without such information, not even a wizard could do the trick. But right now, such information is usually unavailable, or, when it is accessible, too often indecipherable. In fact, the Institute of Medicine estimates that $105 billion is wasted every year in the U.S. because of a lack of competition and excessive price variations in health care, and a lack of information on the price of health care services plays a large role in this waste.
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