Wednesday, May 2, 2018

Ca$h is King

So, last month we noted that New Hampshire was experimenting with a novel approach towards incentivizing price transparency. One of the challenges is that, absent skin in the game, a lot of folks just don't see the value, (or want to put in the effort). But Granite State employees now do have a reason to shop around:

"[A] school nurse who is covered through New Hampshire's state employee health plan, found that choosing a certain facility scored her a $50 check in the mail."

And the idea seems to be catching on:

"The Maine Right to Shop law begins by giving patients direct access to price information, enabling them to make informed decisions about costs of their care."

Actually, that's not true: it "requires health insurance companies offer plans that allow patients to shop for comparable services and provides incentive for them to peruse the healthcare market for treatment that best fits their budget." Plus, whatever savings are realized are split between the carrier and the insured.

This also has potential:

"[A] third key feature of the Maine law allows out-of-network providers to compete for patients on a level playing field ... you can see any provider you want out of network, as long as they are lower-cost."

I like the concept of this approach, but I wonder how carriers will be able to process these kinds of claims. That is, whatever is saved on care may be eaten up by admin costs (and thus) higher premiums. And I'm not the only skeptic:

"Until providers are incentivized to compete for patients based on both the cost and quality of care, the massive waste of resources produced by this predictable market failure is unlikely to be remediated."

Long time readers will recall that I've always been a fan of the 58-state laboratory model, so I'm very interested in seeing how this works out.

[Hat Tip: David Whelan]

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