Thursday, February 23, 2012

Good News and Bad News on Colonoscopies

The Good News is the Bad News is Wrong.

Title of book, by Ben Wattenberg, Simon and Schuster, 1984

Tidings do I bring, and lucky joys
And golden times, and happy news on price.

Shakespeare(1564-1616) Henry IV

February 23, 2012 - The good news, as reported in today’s New England Journal of Medicine, is that colonoscopic removal of adenomatous polys cuts colon cancer deaths by 53% (”Colonoscopic Polypectomy and Long-Term Prevention of Colonrectal Cancer Deaths”) The bad news is that pricing for colonoscopies is chaotic and varies according to your insurance or lack of it, and may cut your access to colonoscopies.

A WSJ Op-Ed today, “Health Care's Coming Price Revolution.”says the private sector is moving to give people the information they need to get treatments that are worth the money, but ObamaCare blocks the way.

The author, a member of the WSJ editorial board, cites the case of 4 identical patients, each undergoing a colonoscopy but having different insurance coverage.

Patient #1 has Medicare. Medicare pays a set price for all colonoscopies regardless of quality or outcome of past colonoscopies performed by the doctor. Medicare pays twice as much if the colonoscopy is performed in the hospital rather than in a doctor’s office.

Patients #2 and #3 have private coverage, one provided “in network” and one outside the health plan’s network. Those out of network pay more. But whether in or out of network, the cost averages about 40% more than Medicare.

Patient #4 has not insurance coverage and must pay out-of-pocket. The “chargemaster” of the hospital bills for a market-up sticker price no one wit6h coverage would ever pay.

To sum up, one doctor, four patients, four different prices, for prices disconnected to value or outcome.

The WSJ writer says this situation is changing because private insurers are out of money. So the big insurers- UnitedHealth, Aetna, Digna, and Wellpoint - are turning to data based on quality and outcome to price colonoscopies. They will use this data as leverage in contract negotiations to force hospitals and physicians show their colonscopies are better than those of competitors.

But the WSJ sadly concludes:

The impulse here is to restore the price signals that will drive U.S. health care to deliver care that is worth the money. But these gains—in transparency and efficient pricing, for instance—will need to be consolidated and expanded to constitute a true revolution. The Affordable Care Act stands in the way.”

“ObamaCare's core philosophies are standardization and centralization, which in practice will mean higher costs for everyone caused by suffocating price competition. The share of insurance industry revenue that comes from government now stands at 42%, up from 36% just three years ago, and that's before the new entitlement kicks in. And a wave of ObamaCare-promoted provider consolidation is creating hospital monopolies that can demand higher-than-competitive prices.”

Which philosophy prevails – government standardization or market-driven pricing based on quality and outcomes – may depend on the Supreme Court decision in June and the election in November.

Tweet: Colonoscopies with polypectomies cuts colon cancer death in ½, but costs for colonoscopies can be prohibitive in non-Medicare patients.

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