Treating health care like a business won’t work

By Mark Luensmann

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On July 10, a Gazette editorial (“Make health care costs transparent”) endorsed patient choice in choosing doctors by price-shopping procedure fees.

It is an attractive idea that if people were just put in charge of their own health care they will take charge and make it work for them. In reality, this idea will only work with significant changes to our current health-care system. To expect people who formerly did little more than go to the doctor and send the insurance company the bill to now price shop among competing claims in an environment no one really understands is certainly setting this idea up for failure.

It seems pretty silly to me to compare health care to just about any other field - in-home construction or auto repair, just to use the two examples the editorial cited - where you have the time to get references and decide whether or not to use a company.

When you need health care, you are sick, you're frightened, you don't have the time or luxury to look around and you need to get taken care of right away.

If this is routine care, then price may be a consideration, but more important is that the doctor accepts your insurance, that you are in network and if the provider needs a preauthorization. And after all that you don't even know if this is the right doctor for you! In an emergency, you don't have time to price shop - you take what's available. Medicaid patients would not - they have a hard enough time trying to find a physician who will accept the ridiculously low payments and still able to support a practice. Elderly people with illnesses won't - they can barely function in their daily lives.

If all patients were the same, you could just look under the hood and give a reasonable estimate and stick to it. People are not nearly so easy. Many times, a simple problem turns out to be far more complex than first thought, and even getting to a diagnosis for a problem deep inside the body requires expensive and extensive testing. Who can anticipate that, much less be “transparent” about it?

There also is quite a difference between the charge for a procedure and the payment for it.

Many of the costs are hidden due to insurance company practices. Many places I've worked have only a few people who post the payments to accounts every month, but need at least three times that number just to follow up with insurance companies to get claims paid.

Another problem is that each insurance procedure payment schedule is negotiated individually. This means that payment for procedures varies from practice to practice. Even then there are companies (as for workers' compensation) that try to negotiate down the amount paid. How can you be transparent in a situation like that?

And if the insurance presented at time of service is not contracted with the practice, the payment will vary yet again. How can you clearly estimate what a procedure will cost (much less try to make a profit) when so many other hands are in it?

There is no easy answer to the problem of rising health-care costs. In my view, attempting to treat it with a business solution won't work in this system. While other parts of the economy are complex, too, few have the mix of third-party payers, emotions and the struggle with life and death that this one does. What we need is a solution we can all live with.

Mark Luensmann of Cedar Rapids has worked in health-care accounting for doctors' offices and billing services for more than 20 years in Maryland, Virginia, Washington, D.C., and Iowa. Comments: MLLobby@gmail.com