Unveiling Transparency in Health Care Costs
TL/DR –
Former surgeon general Dr. Jerome Adams recently received a $10,000 medical bill which was negotiated down to $4,800 by his insurance, but he was left to pay the full amount due to his high-deductible health insurance policy. Health care costs, which make up nearly 20% of the US GDP, are rising rapidly due to health care consolidation and mergers, with 75% of doctors now being employed by large corporations or health systems. The article calls for increased price transparency and consumer awareness of healthcare costs, noting that the Hospital Price Transparency Rule, which requires hospitals to post their charges online, has only been fully adhered to by one third of hospitals.
Surgeon General’s Surprise Medical Bill Highlights Rising Health Care Costs
Dr. Jerome Adams, former Surgeon General under Donald Trump, recently revealed a shocking surprise medical bill following a January trip to an Arizona emergency room. After becoming dehydrated on a mountain hike, Adams received treatment which resulted in a $10,000 bill. Despite his insurance reducing the bill to $4,800, the health system refused to negotiate the costs, stating they were legal and consistent for all patients.
Health care costs, which account for roughly 20% of the GDP, are rising rapidly and presenting a concern for voters in the upcoming election. We need to hold political candidates accountable to address this issue and propose strategies to control these costs.
Health Care Consolidation and Rising Medical Costs
According to the Wall Street Journal, health care consolidation and mergers are a key contributor to the escalating costs. Despite promises of cost reduction and quality preservation, many studies suggest the opposite. Price increases often follow consolidation due to the loss of competition. Over the last two decades, private equity firms and hospital systems have aggressively acquired doctors’ practices, with over 75% of doctors now employed by large corporations or health systems.
Another factor increasing costs is the implementation of “facility fees” when hospitals acquire physician practices. These additional charges can double the cost of a doctor’s office visit without adding any significant value. The Federal Trade Commission (FTC) has made efforts to halt some of these mergers, but the agency is currently underfunded and understaffed.
Medical Debt and High-Deductible Health Plans
Medical debt is a leading cause of bankruptcy in the US, contributing to 66% of cases. This issue is exacerbated as more consumers opt for high-deductible health plans with Health Savings Accounts (HSAs), leaving them vulnerable to substantial medical bills until their high deductible is met. Increased price transparency would allow consumers to better understand these costs and make more informed decisions about their care.
The Importance of Price Transparency and Informed Medical Care Decisions
Less than a third of hospitals fully comply with the 2021 Hospital Price Transparency Rule requiring hospitals to post charges online in a readable format. Many opt to pay penalties rather than reveal their high prices. To help combat rising health care costs, consumers should inquire about the cost of care before receiving it. Persistence is needed when requesting this information due to the often intentionally hidden true costs. Like any other purchase, informed decisions about medical care require knowledge of the product’s price.
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