Improving patients' financial experience requires an end to mafia-style price negotiations - MedCity News

While healthcare may be the most important purchase most people will make in their lifetime, it is also the one they are least informed about. Despite legislative changes such as Law without surprises and the Centers for Medicare and Medicaid Services price transparency ruleUS patients still have a woefully poor understanding of the health care payment process.

A lack of transparency in health care pricing often has devastating consequences for patients, forcing some to sink into deep medical debt and others to avoid doctor visits or skip their medications. This problem won’t improve until the healthcare industry gets rid of price-gouging middlemen and closed-door price negotiations led by businesspeople, according to a panelist discussion during a session at MedCity’s Invest in digital health conference on Wednesday.

The panelists agreed that the CMS price transparency rule is not working. Although it was heralded by lawmakers as a huge victory for patients, many experts keep the faith that the price data that hospitals publish is essentially useless to consumers. The rule is flawed by design because it requires hospitals to post highly complex billing data that is too confusing for patients to understand, the panelists said.

Furthermore, it is impossible to produce an accurate estimate of the cost of care in a fee-for-service environment, Cedar CEO Florian Otto pointed out. For example, patients often switch medications or develop sepsis while in the hospital — true price transparency would include a bundled payment system that takes into account the flexible nature of the entire patient journey to care, Otto said.

Even health system administrators can’t understand price transparency data, according to Ryan Hildebrand, audience member and innovation administrator at LCMC Health. He recalled a recent conversation he had with LCMC Health Chief Revenue Officer Susan Haggard in which he was trying to better understand the cost of care in the health system.

“I asked her, ‘Hey, how much would knee surgery cost?’ there really is no one who understands it from top to bottom. he said.

This complexity and lack of transparency is sometimes worst on the medicine side. Main reason why close to 40% of Americans who skip or ration their prescriptions is due to price gouging by pharmacy managers, said Adrian Rodriguez, vice president of quality and safety at Mark Cuban Cost Plus Drug Company.

His company seeks to cut out these middlemen by going directly to suppliers to obtain drugs. Bypassing pharmacy benefit managers not only often results in 85% cost savings for patients, it’s also a fairer and more transparent way to get people their medications, Rodriguez pointed out.

Pharmacy managers aren’t the only ones who set prices—suppliers are also very capable, according to Maria del Carmen Useda, chief surgical sherpa at Surgical Sherpa. Her company guides patients through the process of negotiating healthcare prices (just like a Sherpa guides a mountain climber). She said she often deals with surgical practices that charge patients several times the Medicare rate for procedures.

Del Carmen Useda shared an anecdote that sums up a problem she often faces in her work. She spoke to a surgeon who was undercutting the prices of the patients he was working with, but he said his hands were completely tied after his practice was bought by Texas Oncology.

“He said ‘I have to code the way they want to code.’ For a procedure they wanted to charge seven times the cost of Medicare. It is not right,” del Carmen Useda said. “I’m sorry, but there is a mafia there. I’ll probably offend some hospital systems, but they’re negotiating with payers behind closed doors and the community is suffering.”

Photo: James Brey, Getty Images

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