Shopping for price in medical care

Health Affairs

Volumn 26, Issue 2, 2007, Pages

  Ginsburg, Paul B ^a  

^a CENTER FOR STUDYING HEALTH SYSTEM CHANGE   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

ARTICLE; CONSUMER; COST CONTROL; DECISION MAKING; ECONOMIC ASPECT; ECONOMICS; HEALTH INSURANCE; HUMAN; INTERPERSONAL COMMUNICATION; REIMBURSEMENT; UNITED STATES; UTILIZATION REVIEW;

CONSUMER SATISFACTION; COST CONTROL; COST SAVINGS; DECISION MAKING; ECONOMIC COMPETITION; HEALTH BENEFIT PLANS, EMPLOYEE; HUMANS; INSURANCE, HEALTH; NEGOTIATING; PREFERRED PROVIDER ORGANIZATIONS; REIMBURSEMENT, INCENTIVE; UNITED STATES;

EID: 33947315926     PISSN: 02782715     EISSN: 02782715     Source Type: Journal    
DOI: 10.1377/hlthaff.26.2.w208     Document Type: Article

References (17)

1. H. Tu and J. May, "Self-Pay Markets in Health Care: Consumer Nirvana or Caveat Emptor?" Health Affairs 26, no. 2 (2007): w217-w226 (published online 6 February 2007; 10.1377/hlthaff.26.2.w217.
2. P.T. Breslin, "The ER: Core Business of the Community Hospital," Bristol Review, October 2003, http://www.mitretek.org/ MitretekHealthcare/ERPart02_Oct03.pdf (accessed 9 January 2007), estimates that 40 percent of hospital admissions come through the emergency department.
3. J.H. Hibbard and E. Peters, "Supporting Informed Consumer Health Decisions: Data Presentation Approaches that Facilitate the Use of Information in Choice," Annual Review of Public Health 24 (2003): 413-433.
4. Increasingly, physicians are following the Medicare relative value scale in setting charges. Should this expand, one could envision physicians' quoting their charges as a percentage of the Medicare fee schedule, a scenario that would facilitate price comparisons.
5. California Office of Statewide Health Planning and Development, "Consumer Information on Hospital Charges," 16 November 2006, http://www.oshpd.ca.gov/oshpdKEY/hospitalcharges.htm (accessed 9 January 2007).
6. The discussion of the role of insurers in price shopping also applies to those intermediaries arranging for discounts for services not paid by insurance.
7. The charge data are based on personal communication with Christopher Hogan, independent consultant, January 2006. These estimates of discounts tend to overstate the impact of insurers' market power because discounting is likely to lead to higher billed charges.
8. The notion of different ways of melding consumerism with managed care appeared in a recent thematic issue of Health Affairs. See, for example, J.C. Robinson, "Managed Consumerism in Health Care," Health Affairs 24, no. 6 (2005): 1478-1489;
9. M.A. Hall and C.C. Havighurst, "Reviving Managed Care with Health Savings Accounts," Health Affairs 24, no. 6 (2005): 1490-1500;
10. B.E. Dowd, "Coordinated Agency versus Autonomous Consumers in Health Services Markets," Health Affairs 24, no. 6 (2005): 1501-1511;
11. and P.B. Ginsburg, "Competition in Health Care: Its Evolution over the Past Decade," Health Affairs 24, no. 6 (2005): 1512-1522.
12. Health plans often have a uniform fee schedule for small physician practices in a geographic area but negotiate higher rates for larger practices depending on their importance to the network. In the Cincinnati area, many physician practices had been able to negotiate higher fees with Aetna, leading the insurer to post the negotiated prices on its Web site. This received a lot of media attention, but price differences among network hospitals are likely to be larger than those among physicians.
13. Jeffrey Kamil, medical director, BlueCross of California, personal communication, 8 November 2006.
14. Business Health Care Group, "Exclusive to BHCG: Humana Preferred (BHCG) Provider Network," http://www.bhcgsw.org/members/hiperfnetwork.asp (accessed 9 January 2007).
15. S. Albaek, P. Mollgaard, and P.B. Overgaard, "Government-Assisted Oligopoly Coordination? A Concrete Case," Journal of Industrial Economics 45 (1997): 429-443.
16. Federal Trade Commission, "Competitive Effects of California Assembly Bill no. 1960," Doc. no. V040027 (Washington: FTC, 7 September 2004), 9.
17. These examples are discussed in P.B. Overgaard and H.P. Mollgaard, "Information Exchange, Market Transparency, and Dynamic Oligopoly," Discussion Paper no. 2005-11 (Copenhagen: University of Denmark, Centre for Industrial Economics, 2005).