Thursday, July 6, 2017

Haggling for medical services

This is Joseph

Lawyers, guns, and Money had an excellent pair of articles on shopping for health care, here and here.  I especially liked this example in the comments of the second article from @randomworker:
I've tried this. My deductible is $7200. First, if you want any amount you pay to go against the deductible you have to confine your shopping to the network.
Ok so you priced out your "initial consultation" with your ENT specialist. In the middle of it she suggests a minor procedure to get a better look. Oops. Now what? Do you say no, and then start the shopping process all over again? But now you have to include another office visit in your calculations. Wait! No ENT specialist is just going to sit you down and poke that thing up your nose without the "initial consultation."
So I just asked her "how much?"
She performs 30 second procedure.
The bill comes. $425. I call. "She doesn't know, don't listen to her. If you need to know, the prices are on the website."
"Oh, yes, here they are. It says $375."
"Those are last year's prices, you dummy. See, it says 2016 right there, at the top!"
"Where are this year's prices?"
"We don't have them yet."
"It's May."
It seems like a parody, but it is exactly the sort of way that a modern medical office is set up to handle costs and billing.  Nothing is set up to handle quotes or prices.  The idea that you would have a transparent price list is an odd one and only really exists in niche areas of medicine where free market assumptions are plausible: think vision correction or laser hair removal.  Nobody's life is at stake fro these procedures but notice that they set up a completely different pricing set-up than most medical offices based on trying to make sure that the customer is able to puzzle out a price.

In particular, like in this example, medical stuff is very susceptible to "creep" in a way that a lot of other fields are not.  In the areas that are, think car repairs, we have had to create a world in which shops are held to binding quotes.  And, even then, who hasn't heard horror stories about new problems showing up in the process of a repair job, leading to unexpected expenses (it's hard to abandon a disassembled car, even harder to abandon a disassembled body).

It is not impossible to imagine ways to make medicine work a lot more like auto shops, but there is a ton of work that needs to be started first to change the whole way medicine currently works.  I am not sure it is a good idea, at all, but if we want to try and make it act more like a market for non-emergency services I see a ton of regulatory issues that need to be addressed.

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