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Medicare costs

As with most things, transparency is good

An appreciation for what health care costs in this country took a big step forward last week when a federal judge forced the release of the amounts individual doctors had been paid for delivering Medicare services in 2012. For some, the amount was in the many millions of dollars.

The data will not answer all questions about why some services cost so much, and why some doctors were paid so much, but it is a start. Some of the startling amounts may have stemmed from the high cost of drugs and perhaps because some doctors were utilizing assistants to increase their office productivity.

Ophthalmologists, with a popular but expensive drug, were among the highest paid, for example.

The release of the data was championed by The Wall Street Journal, and interestingly, was opposed by the American Medical Association. The AMA argued the data would be ambiguous and inconclusive.

Many Americans can be excused for not knowing that what doctors earn from Medicare has, until now, been confidential.

The billings, and what they consist of, are certain to be studied thoroughly. The companies that pay for health care are going to look closely at where they can save money. That includes the largest payers, insurance companies, along with hospitals, clinics and corporations with health plans. And some doctors may see the numbers as a chance to build business by touting no excessive procedures and thus less supplemental cost to the patient. After investigations, expect some doctors’ offices to be labeled “out of network” and others added. Too much money is at stake. And while the subsequent year, 2013, has come and gone, doctors might be beginning this week to be doubly sure that they can defend the type and number of procedures that they are ordering for their patients in 2014.

Transparency in medical costs is slow-coming. Some states, including Colorado, require providers provide their cost of service amounts to a website. Hospitals have to post their charges for designated major procedures to their sites, as well.

But the scrutiny of that information is inconsistent, incomplete and does not receive the visibility and attention that it deserves.

It is understood that no single charge can apply to every patient, but as the number of patients increases – and there is adequate accompanying detail about each patient’s condition – so does the accuracy of the data.

It is not impossible to imagine premium-paying consumers at some point cost-shopping for nonemergency procedures and challenging their company-plan administrator or insurance company agent as to why a significantly lower cost provider with a good record is not a choice. When consumers have to pay a portion of their premium, they have an incentive to influence health-care costs.

Drug stores compete on prescription prices, and the savvy purchaser can save money. And, yes, a patient can take a prescription order from one store name to another in order to receive a better price or better service. An email from your doctor easily makes that possible.

Knowing the costs associated with health care is not the full answer to being able to afford to deliver proper health care to everyone, but it is a portion. Knowing what Medicare spends with doctors is a large part of that equation.



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