Healthcare Efficiency

John brings up a key point about the lack of transparency in healthcare charges.  This will be a real problem for consumers who wish to make choices based on cost, although healthcare is not different from other industries.   Next time you fly, ask the person sitting next to you what he paid for his ticket.  
One problem with the a-la-carte billing process in hospitals is that you can’t know in advance what an operation will cost, making it impossible to comparison shop.  The one exception is ambulatory surgery centers.  They can tell you exactly what your bill will be, and you can safely assume that it will be 20 to 40% less than the charge for the same procedure at a hospital.  The difference is largely due to efficiency, but also to cost shifting.  The hospital charges more for a procedure and uses that excess revenue to support the ER that typically loses money.
Here’s an interesting payment scam to watch out for:  Let’s say you come to my surgery center and the bill is $1,000.  You have an 80-20 health plan with Blue Cross (BC), and you think that means they pay 80% and you pay 20%.  Here’s how it works:  The charge is $1,000, so you pay $200 up front.  We send the bill to BC, but they write back, “No, our contract with the surgery center gives us a 50% discount.  On a bill of $1,000, our charge is $500. Since the patient has paid $200, we only owe you $300.”  At the end of the day, you paid $200 and BC paid $300.
All of this confusion and obfuscation comes about largely because the patient is removed from the payment process.  When Americans regard their health plan as an insurance policy and pay for their own healthcare, things will improve.