• More on pricing transparency

    The July 31 NYT Opinionator blog described in some detail pricing transparency at The Oklahoma Surgery Center. The NYT blog does not allege that Medicare prohibits pricing transparency (we discussed that question here back on July 10). The NYT blog described several private sector and regulatory initiatives (including Obamacare) to promote pricing transparency in health care.

    Bottom line:  I still see no evidence that Medicare prohibits pricing transparency for surgery centers.


    ps. The blog did not h/t or link to Tyler Cowen at Marginal Revolution, who posted on this back on July 10.

    • The dilemma is that, by advertising prices, the ASC is essentially forced to accept the Medicare rate for all patients even if it is lower than the rate other third party payers would pay. Otherwise, the ASC would have to advertise one price for Medicare patients and another price for other patients; the Medicare patients cannot be charged more than the Medicare allowed rate.

      • Your comment assumes that Medicare pricing must be lower than The Oklahoma Surgery Center’s posted prices. If so, it dampens the market place competition story. If not, why couldn’t they offer the lower price to commercial insureds and still take the Medicare ASC rate? Perhaps I’ll get an RA to compare the posted prices to the ASC list (as modified for OK).

        I’m still looking for the Medicare regulation that prohibits transparency. Not saying it doesn’t exist; I just haven’t seen it yet.

    • And the dilemma would be faced up or down since you can’t give discounts to Medicare patients, including waiving co-pays.

    • “Dr. Smith said federal Medicare regulation would not allow for their online price menu.”

      Where is he claiming that Medicare prohibits transparency? He’s just saying their price menu won’t fly with Medicare. Robert Aylward has supplied two reasons above why this could be the case, and it’s not hard to think of several more. Maybe there’s another quote that I missed.

    • My long-time assistant, now retired, had this wonderful expression when told something unbelievable: “I may have been born at night, but not last night”. The point of an outpatient facility posting prices is the comparison to hospital prices. Or as I tell the GIs being recruited to become employees of the hospital: “How many patients will you have after five years when the co-pay for a colonoscopy in the hospital exceeds the entire fee for a colonoscopy in an outpatient facility”. Good luck. Many experts believe that consolidation/integration is the key to a more efficient delivery of health care. Fine. And many of the policies being promoted are designed to get us there – we recently crossed the threshold of more than 50% of physicians working as employees of hospitals. But I would prefer that we be honest about it.

    • Medicare requires participating providers to charge the lowest price. The way for providers would get in trouble is if they charge Medicare a higher price then they would a private pay patient or another insurance company. In any event Medicare will not reimburse providers above its set rate. With the Medicare rates being as low as they are and constantly under threat of being cut further many doctors would be able to do so and stay profitable, Doctors can post the price list as long as it does not discriminate against Medicare.