Thursday, April 14, 2016

Shopping for Health Care Not Yet Perfect

(From the April 14, 2016 issue of the Grand Haven Tribune)

The letters started coming recently. When you deal with lots of doctors, medical bills, and insurance statements, you get a little worried about crisp looking letters from the insurance company.

These letters from Priority Health were not frightening or bearing bad news. But they were at least mildly upsetting. They pointed out a recent specific medical procedure my wife had and encouraged us to use their online price comparison tool to see if we couldn’t find a lower cost option in the future.

Now, this makes some sense at the outset. No one is unaware of the fact that our national health care system is in turmoil, and not least of its problems is the rising aggregate cost. Certainly if patients would start looking for and selecting lower price options for various medical procedures, then in large scale the system would save a lot of money. Free market theory would say that if patients paid more attention to price then prices may even come down.

The two-minute video on Priority Health’s web site makes this point. It reminds the viewer that they may spend months researching a vacation, and they would compare prices when buying a new home appliance. So then, the logic goes, we should pay attention to the varying rates for everything from arthroscopy to Zika virus remedies.

The video falls a little short in its argument, however. If we are going to make medical decisions an economic concern, then we should consider the economics more thoroughly. Economists talk about the assumption of perfect information. In other words, people make economic decisions, both rationally and emotionally, on more than one or two select facts. Perfect information means economic theory such as market price fluctuation and elasticity of demand depends on people having complete information, all the facts, multiple variables. Price is merely one consideration.

Take the vacation and home appliance examples. The considerations we certainly all do in such cases has more than price on our minds. Say you went on a trip to the mountains and got to your low price destination and a man named Clem greeted you toothlessly and offered to carry your bags to the barn, while his brother Earl rocked and played banjo while spitting tobacco and eyeballing your children. I’m going to suggest few if any of us would rejoice at our cost savings for this mountain getaway. Also, having shopped for appliances with a woman, I have empirical evidence that price is one of the last considerations after things like top vs. side load, size and location of freezer, color and materials and so forth.

In the same way, I hardly think we’ll see someone show the scar from a knee replacement and say they still can’t walk stairs without pain but grin and proudly announce they saved hundreds on the procedure. Nor would anyone say at Aunt Edna’s funeral that we’re sorry to see her go but we just couldn’t see paying 12 percent over market rate for that recommended life-saving surgery.

Well, I logged into my Priority Health page to test out this tool. I searched for a chest MRI with contrast, a procedure my wife has had in Grand Rapids, and the results came back that no nearby facilities did this. But a search on Chest CT gave lots of options, including those in Flint and other paces well across the state. When the tool does work, you can chose facilities and doctors and compare a price list, as well as distance in miles from the zip code you enter. There is also doctor information, including specialty, gender, board certification, language the doctor and staff speak, medical school and residency. This is somewhat helpful, but also irrelevant. By that I mean the real information patients want about doctors is their personality—are they compassionate, do they listen, do they think outside the box? They should make transparent in the search results the data from patient satisfaction surveys for both facility and doctor. That matters too.

The tool is a good start. We may consider using it in the future. But more complete information would be better. As a side note, it would be a nice move in the interest of transparency and medical ethics if Priority Health would disclose that Spectrum Health, one of the providers that comes up on price comparison lists, is in fact their own parent company.

If the goal is to save cost, Priority Health could ask Spectrum Health to lower costs. Or, instead of giving Visa gift cards of $50-200 to patients who select “rewardable” options for medical procedures Priority Health could lower premiums or deductibles on policies.

At the end of the day, Priority Health must know that for their patients and policy holders health is in fact the top priority.

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