General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsReference Pricing: Obamacare Consumer Protection Weakened
Imagine youre in your fifties and, after years of living in pain, you decide finally to get that knee replacement. Your physician recommends a local hospital, where he happens to have privileges. You are a savvy consumer, so first you make sure that that the hospital is part of your insurance network. It is. You get the procedure and then, a few weeks later, you get the billfor $15,000. That cant be right, you think. Your plan, which you get from your employer, is supposed to limit your out-of-pocket spending to only a few thousand dollars a year. The Affordable Care Act makes a similar guarantee.
Youre right about what the plan says it allows and what Obamacare is supposed to require. But youre on the hook for that money anyway. You can thank a new way paying for medical servicesand a tentative decision by the Obama Admninistration, little noticed until the APs Roberto Alonso-Zaldivar wrote about it last week, allowing employers and their insurers to use the scheme without much oversight.
The system is called reference pricing and my health economist friends love it. They think it will mean less spending on health carefirst, by encouraging people to shop for better deals and, eventually, by encouraging hospitals to lower their prices. But the consumer advocates and insurance experts I know are queasy over the rules governing its use. Without more safeguards, they worry, beneficiaries wont understand the new system and will end up running up many thousands of dollars in billsthereby weakening one of Obamacares most important new protections.
Both groups make a pretty good case.
Read More: http://www.newrepublic.com/article/117812/reference-pricing-obamacare-consumer-protection-weakened
ProSense
(116,464 posts)Its not as pie-in-the-sky as it might sound. CalPERS, the massive private insurance plan for public employees in the state of California, introduced reference pricing for knee and hip replacements a few years ago. According to an analysis by James Robinson and Timothy Brown, the results were pretty dramatic. The hospitals that charged lower prices got a ton of more business, apparently at the expense of the hospitals charging a lot more. Providers noticed and responded exactly as economists hoped they would. The pricier hospitals started charging less, reducing their fees by more than one-third. (See the graph below.) CalPERS ended up saving $2.8 million, while individual members getting the surgeries realized a net reduction in out-of-pocket expenses of about $300,000. On avearge, that works out to about $700 per patientthe result, primarily, of people seeking out cheaper facilities. That's real money.
...has been "weakened."
This is cost control. Those using CalPERS as an example should report the full model.
From a 2013 NYT article on the CalPERS model:
In California, a large plan for public employees has been especially aggressive in using the tactic, and the results are being watched closely by employers and hospital systems elsewhere.
Under the program, some employees are being given the choice of going to one of 54 hospitals, including well-known medical centers like Cedars-Sinai and Stanford University Hospital, that have agreed to charge no more than $30,000 for a hip or knee replacement. Prices for the operation normally vary widely in the state, with hospitals billing from $15,000 to $110,000 for the same operation, a spread that is typical for much of the nation.
Its a symptom of the completely irrational pricing structure hospitals have, said Ann Boynton, a benefits executive for the California Public Employees Retirement System, known as Calpers, which worked with the insurer Anthem Blue Cross, a unit of WellPoint, to introduce the program.
Overall costs for operations under the program fell 19 percent in 2011, the programs first year, with the average amount it paid hospitals for a joint replacement falling to $28,695, from $35,408, according to an analysis by WellPoints researchers that was released Sunday at a health policy conference.
- more -
http://www.nytimes.com/2013/06/24/health/employers-test-plan-to-cap-medical-spending.html
The misleading information about the "reference pricing" rule.
http://www.democraticunderground.com/10024972599
Cali_Democrat
(30,439 posts)the Republicans and their enablers will do everything they can to tear it down in an attempt to gain an advantage in the 2014 and 2016 elections. They hate the fact that it's been successful and millions of previously uninsured are now insured.
Obamacare saved consumers billions:
http://www.democraticunderground.com/10024968196
Jesus Malverde
(10,274 posts)"The problem ... from the patient's perspective is that at the end of the day, that is who gets left holding the bag," said Karen Pollitz of the nonpartisan Kaiser Family Foundation.
Previously a top consumer protection regulator in the Obama administration, Pollitz said the administration ruling amounts to a substantial change for consumers.
http://www.startribune.com/lifestyle/health/259489931.html
Is Politz a republican?
Such a pricing structure may be a subterfuge for the imposition of otherwise prohibited limitations on coverage, without ensuring access to quality care and an adequate network of providers. That document also warned that employers and insurers using reference pricing must use a reasonable method to ensure that it provides adequate access to quality providers.
The administrations own words.
Jesus Malverde
(10,274 posts)"The problem ... from the patient's perspective is that at the end of the day, that is who gets left holding the bag," said Karen Pollitz of the nonpartisan Kaiser Family Foundation.
Previously a top consumer protection regulator in the Obama administration, Pollitz said the administration ruling amounts to a substantial change for consumers.
http://www.startribune.com/lifestyle/health/259489931.html
ProSense
(116,464 posts)She also said that.
The problem is that people aren't being clear about what's changing and the overall impact. This is clarification of a rule applied to a an existing cost-control method.
From the OP article.
What's the danger here? For one thing, insurers might apply reference pricing to a much wider range of services than CalPERS didand, in some cases, set payment levels so low that access to providers is difficult. Even if insurers dont take these steps, confused beneficiaries could get tests or procedures at more expensive facilities that cost them many thousands of dollars, well beyond what they are supposed to face under the Affordable Care Acts guidelines.
Its hard to know how frequently this happened during the CalPERS experiment, if it happened at all. But the fact that a sizable number of beneficiaries continued to get procedures at higher cost facilities, incurring extra out-of-pocket costs for no apparent reason, raises the possibility that not everybody quite understood the choices they faced. Keep in mind that many people will get procedures wherever their physicians tell themwithout thinking to shop around.
In some respects, reference pricing is of a piece with another cost control technique thats become more popular in the last few yearslimiting beneficiaries to narrow networks of doctors, clinics, and hospitals willing to accept lower price. The difference with reference pricing is that it provides a second, added layer of restrictions and incentives. Its also more novel, because limited networks of one sort or another have been around since the 1980s. The piling of one restriction upon another makes it that much more dangerous, particularly since given that Obamacare's out-of-pocket limits were already pretty lax and that many people still dont understand the basics of insurance.
Like I said, the thing that will be impacted is the structure of networks. The alarm raised by the administration is about access and quality in a more narrow network.
Some are concerned about consumer awareness. The thing is that if CalPERS is a model, the group defined the network.
Jesus Malverde
(10,274 posts)The interesting part abut this is an in network referral could end up costing you thousands. Thousands that are not applied to the out of pocket maximum. Essentially this gives the issuance company the ability to include hospitals and physicians in their plan, but not actually negotiate rates with them and puts the onus on the consumer to get prices from hospitals, price lists they aren't required to provide the consumer.
randome
(34,845 posts)For those of us who don't care to become policy wonks, the next best thing is to look at the overall picture.
ACA is designed to make life better for most people. With that fact in mind, the weight of the evidence, to me, falls on the side of those who say reference pricing is not an evil thing.
'Those who say' include CALPERS and other organizations who think it's a good idea.
One doesn't need to understand every possible detail or contingency to understand that the overall picture promotes this as a good idea, given all the other inadequacies of health care.
[hr][font color="blue"][center]Stop looking for heroes. BE one.[/center][/font][hr]
Jesus Malverde
(10,274 posts)"don't care to become policy wonks,"
Jesus Malverde
(10,274 posts)http://www.dol.gov/ebsa/faqs/faq-aca19.html
randome
(34,845 posts)That's not much to go on.
[hr][font color="blue"][center]Stop looking for heroes. BE one.[/center][/font][hr]
1StrongBlackMan
(31,849 posts)the speculatively perpetually outraged amongst us.