The real battle for health care reform has begun.
As Barack Obama heads to New Hampshire to stump for health reform, his administration has been taking a hard line on health insurers. However, Business Week has declared that the insurance companies have already won the war. Business Week notes that more Americans covered (and skimpier coverage) is helpful for insurance company bottom lines – and points to a multimillion dollar investment by United HealthCare to provide data and talking points for conservative Democrats, who hold the key to the evolving health care reform bill.
Meanwhile, America’s Health Insurance Plans has just released very telling data about provider prices that should make physicians and hospitals blush. As Gina Kolata recounts in tomorrow morning’s New York Times some procedures are charged at over ten times what Medicare allows. This is the ugly other side to Andrew Cuomo’s prosecution of Ingenix, a United HealthCare subsidiary, for calculating inappropriately low “usual and customary” fees. Some of the existing fees are utterly ridiculous. (For instance, in Massachusetts, a provider billed an insurer $10,000 for minimally invasive knee surgery for which Medicare pays under $700!). Of course, there is plenty of blame to go around – insurers pay the lesser of “allowed” and “billed charges,” encouraging providers to bill high amounts so that they leave no money on the table.
The more the public learns about the seemy underbelly of medical billing and reimbursement, the more support will grow for government intervention. Past efforts to regulate prices were largely regarded as failures – although interestingly recent reports of costs of bariatric (obesity) surgery pointed out that Maryland, the only state with remaining hospital price regulation, had the lowest prices for this procedure.
By the way – great 2006 article by Uwe Reinhardt entitled The Pricing Of U.S. Hospital Services: Chaos Behind A Veil Of Secrecy helps explain this crazy-quilt irrational system we’ve got.
