So close, but no cigar

Photo of the floor of the MN State Senate

So close, but no cigar

Has your company ever received a purchase order or had a client sign a contract without you having first revealing your price, or the rate you charge? Would anyone purchase “widgets” from your company without knowing the unit cost of each, shipping costs, or all other related expenses? No! Of course not. That is not how the marketplace works.

Knowing the price of something is a natural and necessary piece of a purchase decision. Who could argue with that? My industry – providing and paying for health care – disagrees.

My industry hides the price of medical and hospital care from you. Oh sure, we’ll definitely tell you how much your insurance premiums are, but we’ll fight to keep the prices of medical care a secret.

Why don’t we tell you the price? The health care industry says consumers aren’t smart enough to understand health care’s complicated pricing structure. Instead, the industry wants you to continue to pay its bills but keep you in the dark – not caring about the price of care.

We offered a solution – What’s your number?

We moved closer to the finish line with our solution in the Minnesota State Senate in 2021 – close, but no cigar.

“What’s your number?” That is our solution. It is the simplest way to inform consumers how to decide about which medical provider to choose, based on price. We devised a practical, usable method of comparing the prices of physicians, hospitals, labs, scans and other medical services and products – with one number. Simple. Transparent. Understandable.

Here’s how it works. Each provider would disclose one number, the Medicare-Percent. This single number expresses the percent of Medicare a provider will accept as full payment for services. It is a single number that applies to every service a provider offers. It’s based on the same concept already used by insurance companies and providers when they sign network contracts – but they don’t want you to know.

Example:

  • Hospital A accepts 250 percent of Medicare as full payment. Hospital Z accepts 200 percent. Knowing this single number, a patient sees that the cost of care is less at Hospital Z than at Hospital A. Eventually, Hospital A will have to adjust their price, or prove to a consumer why they charge more. This is the beginning of competition in the marketplace. This is similar to how your business runs today.

In 2021, Dave Racer, DCI’s Communications Director, and I drafted a bill to require providers to disclose their prices with this single number – the Medicare-Percent. Minnesota State Senator Rich Draheim introduced our bill. The Senate included it in the Health and Human Services “omnibus” bill – 2,100 pages long, that covered a wide variety of subjects. It’s the last step toward passing the new law as part of a huge Human Services bill.

During the State Senate floor session the author pulled our language from the bill.  We don’t know why yet, but we know the author strongly backed the idea. We also know it’s a popular idea with consumers, and we’re not giving up on it.

We’re headed back to the drawing board. We will modify our language to overcome the Senate’s objections and ask them to reintroduce it next year. Meanwhile, we will learn all we can about who opposed it and why – then we’ll find a legislative solution.

Our goal is for health care consumers to be able to shop for care, to know the price – like widget shoppers looking to buy widgets – who know the price and are able to find out about quality.

We know that providers raised a stink about our idea, and why not? For decades now, they have been able to keep their prices a secret. That needs to end.

Our goal, in contrast to providers and payors, is to create a consumer-friendly health care marketplace. That’s what our Medicare-Percent price transparency bill will do.

We’ll get it across the finish line in 2022, and we’ll continue to pursue a simplified, online tool to let consumers evaluate providers by price and quality.

 — By Greg Dattilo, CEBS

Greg Dattilo, CEBS
gdattilo@dci-clientserv.com

A frequent lecturer on insurance and health care issues, Dattilo is the chief executive officer of Dattilo Consulting Inc., and ClientServ, LLC, both located in Minneapolis, Minnesota. Dattilo Consulting offers comprehensive benefits planning services to a wide range of companies and organizations, while ClientServ provides support and administrative service to Dattilo Consulting and other benefit firms.