Free Markets in Healthcare, another medical oxymoron

There are many indications that there is no real health care “market.” That is health care companies, practitioners and suppliers competing for customers in a open system with transparency and equal open access to information about costs and quality. This article from the Boston Globe lifts the veil on pricing variations in Boston

“One reason patients don’t shop for care is that, as a practical matter, they can’t. The pay rates of different caregivers have long been treated as confidential data, veiled by nondisclosure agreements between insurers and hospitals. As a result, there has been no public notice or debate as an insurance system that a decade ago paid hospitals and doctors similar amounts for the same work has grown into one that disproportionately rewards a few.”

And if the consumer shopped for his care:

“I think a consumer that relies on the cross-section of information that’s out there and available to them, it’s akin to being a cork floating in the ocean,” said Dr. David F. Torchiana, head of the Massachusetts General Physicians Organization. “You’ll be driven in random directions by the randomness of the information that you will obtain.”

The confidentiality and closed nature of the system breeds unequal payment for care. We’re talking thousands of dollars difference for the same procedure done by similarly qualified practitioners with similar outcomes.

“If the white slip of paper directs him to do the procedure in Framingham, the insurance company will pay the hospital about $17,000, not counting the physician’s fee. If Alderman is sent to Brigham and Women’s Hospital in Boston, that hospital will get about $24,500 – 44 percent more – even though the patient’s care will be the same in both places.”

“The Blue Cross data show that about 10 hospitals – four Boston teaching hospitals and six community hospitals – are paid at least 30 percent above the state average, while 12 hospitals make at least 20 percent below average, including Cambridge Hospital, which earns about half as much per procedure as the Brigham and Mass. General.”

The system is set up a bit like a shell game. Information is withheld so as to manipulate the system. Pricing is “confidential,” the amounts paid by our insurers for our care, is not available, and the the efficiency and quality of the various provider never evaluated or revealed. In Massachusetts, by the way there doesn’t appear to be wide variations in quality to justify the price differential.

What’s damning about health care in the U.S. is that corporate and non-profit supplier’s main interest is in maintaining profits for stockholders or to increase their hold on the market, not assuring quality affordable healthcare.

Meanwhile the notions of value and efficiency in health car go begging. We need change!!

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