by Gerard J. Gianoli, M.D. – http://earandbalance.net
I must admit that I have been skeptical of presidential candidate Donald Trump. However, as a physician, I find a lot to like about Mr. Trump’s healthcare plan that has just rolled out. While many aspects have been brought up by other GOP hopefuls, the aspect of price transparency is different. No other candidate made this point, but it goes to the heart of a true free market in medical care.
I welcome transparent pricing. I am a third-party-free physician. I am not a concierge doctor—someone who charges a monthly or annual fee. I charge a fee for services rendered, but I have no contract with any insurer or with Medicare (i.e. third-party payers). Patients pay me, and my office gives them a claim form to submit to their insurance company for reimbursement. How much they pay me is the same for everyone. How much they get reimbursed varies according to their own insurance plan. Some get 100 percent reimbursement, and some get nothing (if they have no out-of-network benefits), but usually it’s somewhere in between. The patients are told in advance, before they even schedule an appointment, how much the visit will cost.
Consequently, I have to keep my prices competitive, or patients will go elsewhere.
By contrast, ask a doctor or hospital who accepts your insurance how much it will cost for anything (or even ask the insurance company). They will not be able to tell you. It’s not that they don’t want to tell you. It’s that they really don’t know. The charged fees, which are multiples higher than what they expect to receive in payment, bear no relationship to what you will ultimately pay. Every insurance company has contracted prices, which vary from doctor to doctor and hospital to hospital. Worse, the contracted price not only varies from one insurance company to another, but also varies within an individual insurance company from one type of policy to another. The bottom line: No one knows how much you will owe until about 2 months after the services have been rendered.
How can you comparison shop when no one knows the price?
If the price is hidden, how can you even make an informed decision as to whether you even want the service in the first place? Of course, you can’t.
For example, most people want a car, but would you want a car if it cost $500,000? Some would, but most wouldn’t. They’d catch a ride with a friend, take the bus, ride a bicycle, walk, or even stay home. The same applies to medical care. If one hospital costs more than another, you might want to go with the one that charges less. Alternately, if the higher priced hospital or doctor had a better reputation or better outcomes, you might be willing to pay the higher price. In our current system of third-party payers, you have no way of knowing who charges what.
What happens when prices are transparent? Price transparency fosters competition which fosters lower prices and higher quality. Just look at the cost and quality of refractive eye surgery. In the past 10 years the prices have gone way down while the quality has steadily improved. This cannot be said about the rest of medical care.
The Affordable Care Act (“ObamaCare”) has institutionalized the problem of price opaqueness by mandating insurance coverage. Without self-payment, there is no source of information about the market price. Prices will continue to rise. And quality will continue to decline, as health insurance plans, as well as Medicare and Medicaid, limit patients’ options to whatever hospitals and physicians are on the insurance panel, i.e. in-network. Although patients can go “out of network”, they are penalized, cajoled, and intimidated to use in-network hospitals and doctors.
So, the current healthcare market restricts your choice of doctors and hospitals, and prevents you from knowing the price you will pay until after you receive the services. This means less choice and higher costs.
Transparent pricing, which we are seeing in third-party-free practices and direct-pay medical practices, should be the norm for all medical services. When transparent pricing becomes the norm, we will see how overpriced services have become inside the insurance-payment system.
My congratulations to Mr. Trump for pointing out an element of free-market capitalism that has eluded GOP recommendations for healthcare reform for so long.
Gerard Gianoli, M.D., F.A.C.S. specializes in Neuro-otology and Skull Base Surgery. He is in private practice at The Ear and Balance Institute, located in Covington, but is also a Clinical Associate Professor in the Departments of Otolaryngology and Pediatrics at Tulane University School of Medicine. He pioneered treatments for Superior Semicircular Canal Dehiscence and other vestibular disorders. His private practice has a worldwide reach, with patient referrals coming from all over the United States and from around the world.
Dr. Gianoli opted out of Medicare in 2001 and has had a 100% third-party-free practice since 2005. He’s lectured and written extensively (as well as had numerous media interviews) on third party free medical practices and free market medicine. His editorials have appeared in The Wall Street Journal, Forbes, Investor’s Business Daily, The Hill and other popular periodicals.
He has received numerous awards, including the American Academy of Otolaryngology’s Honor Award, and has been named in America’s Top Doctors and America’s Top Physicians every year since their inception in 2001 and 2003 respectively. Dr. Gianoli practices all aspects of neuro-otology but has a special interest in vestibular (balance) disorders. He has researched, lectured and published extensively on the topic of vestibular disorders. Website: http://earandbalance.net