Managed Healthcare Executive - February 2009 - (Page 28) { TECHNOLOGY } employees. They eventually extended the reach to Atlanta, Detroit, Los Angeles, Minneapolis and Pittsburgh. Such largescale transparency e orts drive the industry as a whole. Many believe informed consumers will be more discriminating in their healthcare purchases, thus reducing waste and increasing value. Some insurers even offer price comparisons based on actual fee schedule amounts. Drozdowski says those fee schedules can vary dramatically. “Historically, hospital systems and large physician groups have leveraged their size or market position to negotiate prices that are in some cases, higher than average,” he says. The Congressional Budget O ce examined pricing transparency in a brief published in June 2008. It found pricing “is not uniform among providers or payers,” which is no surprise. As competing pro- viders negotiate among payers, prominent urban hospitals often net better rates than smaller community hospitals. Such disparity in healthcare pricing— revealed more frequently by Internetbased data sources—is proof of the need for industrywide cost disclosure, according to some transparency advocates. “With progression of price transparency, the payment system will become more simpli ed and more rational,” says Kate Banks, president of customer revenue strategy and improvement for MedAssets Inc., a technology rm. The healthcare payment system has been cited as irrational quite often by former HHS Secretary Mike Leavitt. Patients nd themselves at a loss for understanding their own out-of-pocket costs much less the actual cost of services. A July 2007 study, “Women’s Health: OB/GYN Trends Report,” by healthcare comparison shopping site vimo.com reviewed various diagnosis-related groups (DRGs) and compared costs for OB/GYN procedures across the country, based on ZIP codes. It found, for example, a hysterectomy in Sacramento cost $2,912, while the same procedure in Modesto, Calif., cost $75,752—a di erence of 2,500%. A growing number of states in the past year have created sites where consumers can access pricing information, including Arkansas, Florida, Maryland, Massachusetts, Minnesota, New Jersey, Ohio and Utah. Todd Nelson, a member of Healthcare Financial Management Assn.’s national advisory council, says cost transparency initiatives should do two things: help consumers understand costs and choose lower-cost care; and encourage providers to contain costs. MHE 28 FEBRUARY 2009 http://www.vimo.com http://www.jacobsononline.com http://www.jacobsononline.com
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