All over the country people are commenting on the ridiculous pricing from healthcare facilities and providers. Here is a recent example I came across:
You’ll note that the gross price for these lab tests is $837.74 and the person was told their out-of-pocket responsibility could be $109.85. What is so amazing about this is I have heard of wellness companies that purchased lab services for their programs being charged $21 for a similar series, without the PSA, if the draw was done at a laboratory service center and $65 if the draws were done onsite at the employer.
So lets take out the PSA at $148.48/$19.47 and there you have it, gross pricing for these services is almost 33 times what they sell this service to wellness vendors on a wholesale basis (which obviously has a profit in it), and the person getting these tests could potentially pay four times that amount out of pocket with their PSA portion excluded.
I assume that the insurer, a major health plan, has a larger discount than that given to a wellness vendor. It will be interesting to follow this and see if the health plan pays any portion and what the final out-of-pocket is for the person. If it totals $21 I’ll eat my hat.
The markups in healthcare, which are driven by FFS pricing and payers who sell to employers based upon discounts off of charges has created a monster that is completely dissociated from reality.
In attempting to control healthcare costs, improve health and seek better utilization of healthcare services by their employees, one key area of focus by employers needs to be health literacy. It’s clear that poor health literacy is a strong indicator of health care costs. Here are some statistics:
Tom Chamberlain, PharmD, the Founder and CEO of EdLogics joined Gregg Masters and me on PopHealth Week to discuss their platform and how it works to improve Health Literacy and engagement.
From their marketing materials:
EdLogics is an education-based consumer engagement company that provides innovative health education and learning management solutions to employers, health plans, healthcare providers, and government entities. Through interactive game-based learning, multimedia educational programs, innovative gamification strategies, and rewards for educational achievement, EdLogics is transforming the way consumers learn about health. The EdLogics Platform makes learning fun and engaging, measures learning comprehension, improves health literacy, and empowers consumers to take greater responsibility for managing their health.
You can learn more about their platform via this video (http://www.edlogics.com/overview/)and listen to the interview on PopHealth Week below:
For full disclosure, I am an advisor to EdLogics.
PopHealth Week is Produced by Health Innovation Media
At the recent Health Datapalooza conference, Sylvia Burwell, the HHS Secretary announced a new initiative, A Bill you Can Understand, :
a challenge to encourage health care organizations, designers, developers, digital tech companies and other innovators to design a medical bill that’s simpler, cleaner, and easier for patients to understand, and to improve patients’ experience of the overall medical billing process.
This is a laudable if perhaps slightly misdirected effort.
There was an interesting report by McKinsey and Company about the health insurance exchanges, the dropping out of several large insurers like United Healthgroup and Humana and which plans were being successful. Together with Brian Klepper, I published a post on The Doctor Weighs In. You can read it here:
What Happens when its Easier to Raise Rates than Manage Care