iLoveBenefits: Industry News Blog

…and if there were medical services price transparency… what would the public think

Prescription Drug Cost Perceptions

Here are some key findings from the June Kaiser Health Tracking Poll regarding the public’s views on prescription drug costs:

  • Almost three quarters (73%) of the public say prescription drug costs are unreasonable.
  • 76% of those believe costs are unreasonable because pharmaceutical companies set the prices too high.
  • 1 in 10 say that insurance companies are responsible for the costs by requiring people to pay too much.
  • 10% say that both pharmaceutical companies and health insurance companies are to blame.
  • Three quarters (76%) say it is easy to afford their medicine, while a fifth say it is difficult.
  • 53% say there is not enough price-limiting regulation vs. 12% who say there is too much regulation.

Source: Kaiser Family Foundation, June 16, 2015

June 22, 2015 | Categories: Cost,drugs,healthcare,insurance | Tags: , , , , | Comments (0)

Making prices consumers pay transparent may help control prices

Seeking Lower Prices Where Providers Are Consolidated: An Examination of Market and Policy Strategies, by Paul B. Ginsburg and L. Gregory Pawlson. The authors discuss a wide range of strategies at the disposal of payers and policymakers to curb the market power wielded by providers. For example, they point to the information systems that many private insurers are developing to produce real-time estimates of patients’ out-of-pocket costs—data that patients could use to become more price-conscious when choosing providers.

Then there is this:

Tthe Health Care Cost Institute announced that it will work with three health insurance companies – United, Aetna, and Humana – to lead an industry-driven effort to provide transparency on prices paid for health-care services by making them available on-line.  The new initiative will offer consumers a “reference price” for health services in their communities, based on aggregated data from insurers. Customers will get more information about prices, including how much they’ll have to pay out of pocket.  “The public has been clamoring for this,” said David Newman of the Health Care Cost Institute.  “This was the next natural step for us as an institute to evolve to.”

Price Transparency is Coming to a City Near You

On Wednesday, the Healthcare Financial Management Association (HFMA) – a coalition of hospitals, insurers, doctors, and consumer advocates – released a report that recommends ways in which providers, issuers, and employers can make information about health care prices readily available to consumers.  HFMA also released an accompanying guide telling consumers how to get such information.  The report says that all Americans “should be able to receive accurate price estimates from a reliable source; that transparency should help people make meaningful price comparisons ahead of service; and that price estimates should be accompanied by other relevant information (e.g., quality, safety, or outcomes) that will help consumers assess the value of a healthcare service.”

Price transparency is beginning to expose variation – where will it lead

According to a recent report, hospitals in California’s highest-priced hospital region charge 2.7 times as much for surgery as do hospitals in the lowest-priced region.

Source: “Your Price May Vary: Geographic Variation in Hospital Charges in California,” CALPIRG Education Fund, Summer 2012,

For now it is the prices

Study: Health care utilization down, but costs are up
Americans with employer-sponsored insurance had fewer hospital stays and visited outpatient clinics less frequently from 2009 to 2010, but prices for inpatient and outpatient care rose by about 10% or more, according to a Health Care Cost Institute analysis of more than 3 billion claims for medical care. The average price of generic drugs fell over the same period, but prices for brand-name drugs rose, the analysis found. The Washington Post (5/21),  Read report at:

But the study also showed that the biggest driver of the increase was facility prices, not utilization or severity of conditions.   

  • Average facility payments for inpatient surgeries increased by 6.4% (from $25,469 to $27,100)
  • Average facility payments for outpatient surgeries increased by 8.9% (from $3,163 to $3,443)
  • Average facility payments for emergency room visits increased by 11.0% (from $1,195 to $1,327)


Overall, inpatient admissions decreased by 3.3%, prices increased by 5.1%, and the intensity/severity of inpatient cases increased by 0.7%.  After adjusting for the small increase in intensity/severity, inpatient admission prices increased by 4.6%, i.e., increases in prices more than offset the lower utilization


It’s the prices…suppliers taking advantage of a third party payer system?


Higher Health Care Spending in U.S. Doesn’t Translate into Superior Overall Care

By now, it’s common knowledge that the United States spends more on health care than other industrialized countries—often much more. But what are we getting in return for all this spending? According to a new study from The Commonwealth Fund, patients in the U.S. do not receive “notably superior” care compared with our peers internationally, despite health expenditures totaling nearly $8,000 per person in 2009—one-third to two-thirds more than in 12 other advanced nations.

While the U.S. performs well on breast and colorectal cancer survival, it has among the highest rates of potentially preventable asthma deaths and diabetes-related amputations, and rates that are no better than average for in-hospital heart attack and stroke deaths (see our infographic). Higher prices and greater use of technology appear to be the main factors driving high U.S. spending, rather than greater use of physician and hospital services. 

To learn more, read Explaining High Health Care Spending in the United States: An International Comparison of Supply, Utilization, Prices, and Quality.


May 3, 2012 | Categories: Cost,healthcare,Technology | Tags: , , , | Comments (0)

Stand up and demand prospective price transparency for every health care service

What if I told you there was a cost-effective way to help businesses and employees lower their health care costs without sacrificing quality of care? Better yet, what if the solution could be easily implemented by businesses alone, without requiring government intervention or legislation?
What if I told you that the single most consequential thing that consumers could do was to demand price transparency – prospectively – for every health care service?
February 1, 2012 | Categories: Benefits,Cost,healthcare,insurance | Tags: , , , | Comments (0)

Pricing disparities for most widely prescribed imaging services

There is a great need to require pricing transparency in health care. It may be that transparency will lead to price competition and the lowering of prices. It seems like it is worth doing as is done in so many other areas of the economy.

According to findings presented in the latest Healthcare Transparency Index from change:healthcare, significant pricing disparities exist for the most widely prescribed imaging services at outpatient facilities, freestanding imaging centers and medical offices both from region to region and within the same region. Among study findings:

  • CT Scans: The greatest savings potential existed in the Southwest where a patient could pay up to 683 percent more for the same CT scan. However, patients in the Midwest who saw lower variances still paid an extra $290, or 120 percent.
  • MRI: Patients receiving the same MRI in the same area of the Southeast could pay a high of $2,500 and a low of $560.
  • Ultrasound: The highest price of an ultrasound reported was $700 for an abdominal examination, where the low price in the same area was $120.
  • PET Scans: The reported cost in the Northeast ranged from $3,500 to $4,500, while patients in the Midwest paid a maximum of only $2,500 and a minimum as low as $1,400.

Source: change: healthcare. June 30, 2011

July 12, 2011 | Categories: Cost,healthcare | Tags: , , , | Comments (0)

It is time to make health care prices truly transparent

Study: Health care costs vary widely, even within towns
Prices patients pay for procedures such as MRIs, CT or PET scans, and ultrasounds can vary more than 600% within the same town, a Change:healthcare review of claims data from May 2010 to May 2011 found. But it is often difficult for either doctors or patients to find out costs before procedures are performed. USA TODAY (6/30)

Paterson proposes government rate setting on health coverage

Editor’s note: Okay, so does anyone remember the real mechanics of the old process? For example, when they say the approved rates didn’t work out on an actuarial basis, what really happened was the allowable rate corridor between the proposed and actual outcome was so wide as to be useless. So they are setting 85 and 75% as the medical loss ratio (MLR). Let’s see what happens after lobbying. Most major health plans target an 80% MLR today in their overall book of business model. So is this more for show? Or will it have a negative impact on the medium and large businesses in the State?

More importantly, however, while making sure that profits and administrative costs are reasonable — the governor is concentrating on the small end of the costs. It is the actual overuse and misuse of health resources that is creating the much of the overall cost issue — otherwise known as utilization. The second issue is the price. The prices in the US are significantly greater than the costs in any other country. Why do you think that Medical Tourism is so attractive and growing exponentially?

Sen. Neil Breslin and Assemblyman Joseph Morelle recently introduced Gov. David Paterson’s proposal to reinstate “prior approval” of premium rates for small group and individual health insurance coverage.

Prior approval of health coverage rates was eliminated in 1995 because the governor and legislature recognized then, that government-rate setting was an artificial and politically based price control mechanism that resulted in arbitrary and erratic premium increases. Instead, the state turned to an actuarially sound and objectively based process, known as “file and use.”

Under current law the Department of Insurance must approve the initial rates for new small group and individual products. In subsequent years, health plans file their premium increases on those products with the department, and, if the rates meet certain projected actuarial standards that limit profitability and administrative costs, the health plan may use those new rates. Later, if it is found that a health plan failed to meet those actuarial standards, refunds are issued to customers.

The governor’s proposal would require prior approval of most rates going forward for both new and existing products. The Superintendent of Insurance could deny a rate increase he or she finds “unreasonable”. This “reasonableness” test is added to the current requirement that a rate not be excessive, inadequate, or unfairly discriminatory. The proposal sets 85 percent as the minimum amount of premium that should be used for medical benefits for both small groups and individuals. The current amounts are 75 percent for small groups and 80 percent for individuals.

For the governor’s memo:

For the Senate prior approval bill S. 5470:

For the Assembly prior approval bill A. 8280: