by Patrick Appel
A reader writes:
Your ongoing series of "Sickbed" posts is truly plumbing the depths of ignorance. I'm used to that in the healthcare debate, but not from a blog I respect. To wit:
1) The reason the CPT codes exist is to standardize billing practices and allow insurance companies (and Medicare) to create standard fee schedules. It has also, coincidentally, allowed one of the worst creations in the last twenty years -- RBRVS -- to try to properly allocate fees to resources consumed. No one in their right mind would use a prose procedural description to bill as it would result in six thousand mails between insurer and provider clarifying exactly what was done. The CPT codes allow the insurance company to know precisely what was done and to bill accordingly. It's never as simple as "we delivered a baby" or "we took out his appendix". Every procedure has variants that need to be clarified. CPT allows this.
CPT is opaque to an outsider. But the thing is that the patient should never have to see these codes.
I have been provided estimates by providers numerous times. I have provided them myself when I worked in medicine. Sometimes those estimates can be off due to complications (and people frequently forget that they have multiple providers). But every practice in America uses some electronic system to punch up those codes and match them to prices they bill the insurance company. That can provide a maximum charge, at least, and possibly a fee schedule charge.
2) Your e-mailers are clearly unaware that insurance companies aren't the only ones who can negotiate prices. Uninsured patients can do it too. Indeed, one of the beauties of HSAs (about which your blog says conspicuously little) is that has allowed patients to get back into the practice of negotiating lower prices with providers. When I worked in medicine, I frequently reduced charges or wrote off charges while working with patients in financial trouble. The only patients we ever turned over to collections were the distressingly large fraction that wouldn't even talk to us despite numerous letters and phone calls offering to help them set up a payment plan.
Speaking of Health Savings Accounts, Alex Tabarrok posted yesterday on a favorable review of consumer driven health care plans. Conservatives tend to focus on patients as consumers of health care dollars while liberals by and large focus on doctors as the primary decider of health care expenses. Obviously, the incentives for both doctor and patient are out of wack. Market-based reforms can work in some instances I'd like to see doctors provide approximate costs and likely benefits to patients before performing most procedures but markets don't do very well when consumers have bad information or are in a panic.