18 Nov Creating a health care marketplace
By Greg Dattilo, CEBS and Dave Racer, MLitt
This is the second of two articles about creating a patient-friendly health care marketplace to replace today’s overly-unaffordable marketplace. The first article explained how a Health Information Exchange allows anyone to shop for health care providers based on price and quality.
Since that article, Kaiser Family Foundation reported that the average annual premium for employer provided family health insurance in 2021 is $22,221.[i] This premium cost compares with average annual mortgage payments of $17,844.[ii] Insurance premiums now exceeds the average cost of a mortgage by 25 percent. Clearly, this cannot continue.
This second article shows how the Health Information Exchange can increase provider competition resulting in better quality while reducing prices.
On a Health Information Exchange anyone can find any provider’s price and patients’ comments about the care the patient received. Eighty-percent of all medical care services received are non-emergency. This means you have plenty of time to see who might be price-gauging and/or providing low-rated care. Finally, patients will be empowered with the knowledge needed to make a good decision which provider to choose.
The Health Information Exchange will be most popular with individuals:
- Moving to a new area and seeking out medical care;
- Whose doctor has retired or moved away;
- Who are frustrated with their current providers;
- Who just received a new diagnosis that requires specialty services;
- Who just learned they are pregnant;
- Comparing providers within an insurance network.
For example, Maria needs an OB-GYN Doctor
Maria Lopez bought a home pregnancy test and confirmed that she was pregnant. After sharing the good news with her husband, she decided to look for an OB/GYN doctor nearby.
The Lopez family has a high deductible health plan. The price of care was important to them. Knowing a doctor’s prices was essential.
Maria heard about the free online Health Information Exchange website that allowed a person to easily compare all the doctor’s prices using just one number. On the website she found this price information about Dr. Able and Dr. Baker.
Dr. Abel’s Number is 100%, which means Abel accepts the same amount as Medicare pays. Example: For an office visit, Medicare pays $150. Dr. Able accepts $150 as payment in full.
Dr. Baker’s Number is 200%, which means Baker requires payment of two times what Medicare pays – $300 for an office visit.
Maria now can easily see that Dr. Baker wants twice as much as Dr. Able for the same office visit.
Next, Maria wanted to know about the quality of care provided by Dr. Abel and Baker. On the Health Information Exchange, she saw that patients are the ones who report their experience with their doctors. She liked that because it was understandable and after all, she is also going to be a patient – best to see what other patients say.
On the Health Information Exchange, there’s a place where providers can show the reasons they should be a preferred choice. Maria read that Dr. Abel performed 30 percent fewer C-Sections than the national average. Abel said he only did C-Sections as a last resort. Maria wanted to avoid a C-Section if possible. Dr. Baker said nothing about this.
Maria saw that even though Dr. Baker charged so much more, her reviews were not as good as Abel’s. Patients said Baker spent very little time with them and seemed disinterested. Abel’s patients were generous with their compliments about him.
Maria made an appointment to see Dr. Able. She found that the comments reported by other patients on the Health Information Exchange were “right on.” She especially liked the fact that Dr. Abel’s price better fit her budget than the $300 Dr. Baker wanted to charge.
After giving birth to her daughter, Maria reported her own experience with Dr. Able on the Health Information Exchange. Now other patients like her could use her comments to make their own choice.
(Find similar stories in The Manual – Health Care 2020: Connecting the Dots.)
Information Exchange Results
The Health Information Exchange not only helps patients, it changes the provider’s business model. Today, doctors get many of their new patients only because they are in the patient’s insurance network. This creates complacent doctors who do not have to concern themselves with competing for patients on quality or price.
In Maria’s case, the Health Information Exchange made Dr. Baker’s price fully transparent. This means Baker must convince Maria that her quality and service is twice as valuable as Dr. Abel’s, but Baker’s patients, as seen on the Health Information Exchange, show they disagree. Dr. Baker now faces the need to improve her quality of care and reduce her prices – complacency means losing patients.
The Health Information Exchange creates a consumer marketplace for medical care. Just like buying other products and services, patients will be able to see the price, learn about quality, and evaluate the provider’s range of services, plus other factors important to each patient.
For learn more about Health Information Exchanges, see https://themanualhealthcare2020.com.
[i] Claxton, Gary, Matthew Rae, Gregory Young, and Nisha Kurani (2021) 2021 Employer Health Benefits Survey – Section 1: Cost of Health Insurance. KFF. https://www.kff.org/report-section/ehbs-2021-section-1-cost-of-health-insurance/, accessed November 10, 2021.
[ii] Pritchard, Justin (2021) Are You Paying More Than the Average Monthly Mortgage Payment? The Balance. https://www.thebalance.com/average-monthly-mortgage-payment-4154282, accessed November 11, 2021.