Now Viewing: Health Care Payment Reform

Exactly How Much DOES That Appendectomy Cost?

Aug 1, 2014, 4:29 PM, Posted by Andrea Ducas

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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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A Connections Checklist: Bringing Health Care and Communities Together

Dec 10, 2013, 1:34 PM, Posted by Hilary Heishman

Cure Violence Community meeting

The conversation is nearly everywhere I go for work lately. More than cost trends, or accountable care organizations, I hear people in both public health and health care circles talking about how we need to be better connected.

Across a variety of health roles, many people are embracing the belief that individuals and the communities we live in will be better off—regarding health outcomes, health care cost, health disparities, corporate productivity, individual quality of life, and so forth—if health care providers, the public health system, and social services are better connected to each other and to the communities in which patients live.

Fortunately, it’s not all talk. In communities across the nation people are trying their best to connect systems to improve the overall health of those who live there, driven by a combination of compassion, pragmatism, pressure, policies, and overall gestalt.

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When it Comes to Health Care, We’ve Been Living in the Land of Oz for Too Long

Sep 6, 2013, 4:30 PM, Posted by Tara Oakman

Cost Report April 2013

“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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Carrots, Sticks, or Something Else? Motivating Doctors to Transform Health Care

Aug 14, 2013, 2:14 PM, Posted by Susan Dentzer

Craig Sammit Craig Sammit, MD, president and CEO of Dean Health System, and Holly Humphrey, MD, dean for Medical Education at the University of Chicago Pritzker School of Medicine

An old joke has it that the doctor’s pen is the costliest technology in medicine, since money typically flows where physicians’ prescriptions and other orders decide that it should go. As a result, influencing these decisions is key to achieving the Triple Aim of better health and health care at lower cost.

But what’s more likely to influence doctors: external factors, such as bonuses for improving the quality of care, or internal factors, such as appealing to their sense of altruism or satisfaction with their work?  In other words, carrots, sticks, or something altogether different—what Daniel H. Pink, author of Drive, calls “our innate human need to direct our own lives, to learn and create new things, and to do better by ourselves and our world”?

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