Month: November 2017

The 3 Top Reasons Why Your Hospital Bill Is So Confusing

Healthcare

It’s no secret that we have a pricing issue in healthcare. The U.S. healthcare spending was $2.7 trillion in 2011 and is expected to reach 20% of our GDP by 2020 if this trend continues. We spend twice as much per capita on healthcare in this country, but ironically our health ranks among the worst in the world. For us, the baffling reality is that the high cost of healthcare in no way means that we are healthy.

When we break down our cost and quality issues in healthcare, we find that the experience for patients trying to navigate the maze of the health system is a micro version of the macro problem. It’s confusing, and it seems that there is no relationship of the cost of services and their quality.

Why? Our best intentions say that the average consumer has the tools they need to gain some visibility into pricing of healthcare services, but unfortunately there are some big obstacles that make this difficult.

1.      Different patients and payers are charged different prices for the same services. Each hospital assigns a price to each service in what’s known as a “chargemaster.” This is a price list for each and every service and supply a hospital provides. The chargemaster is something very few people inside a hospital have visibility into, let alone consumers trying to navigate the health system. Oh, and we should mention that a chargemaster could contain 20,000 services and supplies; scrutinizing price lists is not easy for the average person. Insurance companies negotiate these list rates down for their “in network” providers. These discounts are usually related to how much buying power the payer has, and these discounts tend to be buried in private contracts. A patient who is uninsured or out of-network does not get the same negotiated discount on services that would be afforded to a patient who is insured and in-network. 

2.      Prices for the same services can vary significantly from hospital to hospital. Can you imagine 2 car dealerships each selling a Honda Civic, where the price at one dealership is $18k, yet the price at the other dealership is $100k? Well, this is exactly what happens in healthcare right now. The difference between prices for the same procedure can be upwards of 800%, and the price difference is in no way indicative of a higher-quality surgery. 

Consider a few real examples:

  • report from the Healthcare Financial Management Association cited estimates between $33,000 and $101,000 for a knee replacement when several dozen health providers were asked by the US Government Accountability Office.
  • The cost for a hip replacement can range between $11,100 and $125,798.
  • An appendectomy can cost anywhere between $1,529 and $186,990.
  • A basic health care plan available under the ACA can cover most, but not all health expenses. According to George Washington University, an appendectomy could mean anywhere between $458 and $56,000 in patient out-of-pocket expenses.
  • Cotton swabs or x-rays can be marked up by 400%.

3.      Even if you shop around, you can still get a surprise bill. If you have ever needed a trip to the emergency room, chances are your wallet may have taken a hit. A recent Yale study found that 1 in 4 emergency room visits to an in-network hospital resulted in surprise billing to consumers for an out-of-network doctor. That’s right—your in-network hospital can bill you for out-of-network doctors. This could be for an anesthesiologist, a radiologist, or a doctor who is helping your in-network surgeon, and involvement of any of these individuals on your care team could end up on a surprise bill once you’re discharged.

The reality: price transparency in healthcare is murky at best. The Catalyst for Payment Reform gave 43 states an “F” grade for price transparency in health care. You can see how your state stacks up here: Report Card on State Transparency Laws 

Health Transparency Grade, By State

Source: 2016 Report Card on State Transparency Laws 

How employers can help. Employers are footing $640 billion of the healthcare bill in the U.S.; we have the buying power and leverage to have a say as to where this money is going. The lack of healthcare price transparency makes it a challenge for people trying to navigate the healthcare system, but employers can use strategies to control the source of healthcare costs. Stay tuned for my part II of this post, where we will explore these strategies in detail.

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BetaXAnalytics partners with employers to use the power of their health data “for good” to improve the cost and quality of their health care. By combining PhD-level expertise with the latest technology, they help employers to become savvy health consumers, to save health dollars and to better target health interventions to keep employees well. For more insights on using data to drive healthcare, pharmacy and wellbeing decisions, follow BetaXAnalytics on Twitter @betaxanalytics, Facebook @bxanalytics and LinkedIn at BetaXAnalytics.

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Blockchain is Like the Internet of 1992

blockchain

If you’re in the banking or healthcare industry, you’ve likely heard the term “blockchain.” On the surface, this technology behind the exchange of bitcoin may not be taken seriously because some think that bitcoin, now valued at $41 billion, is a passing fad. But as the framework that makes bitcoin exchange possible, blockchain provides an innovative level of security that allows anonymous people who do not know each other to exchange money, without the traditional safety net (or fees) of a bank acting as a middle-man to authenticate funds transfers. And since this solution has opened up so many possibilities within the financial sector, many other industries are preparing for how blockchain can fundamentally change the way we all do business.

Imagine it’s 1992. Think back to what the internet was to you at that time. During this year, the first readily-accessible browser of the “World Wide Web” was launched. At the time, how would you have explained to people what the internet was?

In 1992, the internet was described as “a wide-area hypermedia information retrieval initiative aiming to give universal access to a large universe of documents.”

HUH? Sure, this description is technically true, but in 1992 this didn’t even begin to scratch the surface of how the internet would fundamentally change daily life for us all in 2017. In the ‘90s while we would wait 15 minutes to dial-up to the World Wide Web or wait 10 minutes for a picture to download, it would have been hard to imagine a day when we would do most of our banking, shopping, reading and communicating online.

Today is not so different from 1992, because we still have the same difficulties describing new technology and envisioning how it can change our lives as we know it. In the context of bitcoin exchange, blockchain creates an encrypted peer-to-peer network where every single bitcoin transaction is recorded and validated throughout the entire network. This is different from our traditional model of transferring money from one account to another, where we rely on a bank (a central location) to verify that originating funds are available, to guarantee the safety of the funds while they are in transit, and to ensure that these funds reach the destination account as intended. Today, banks act as intermediaries for financial transactions, which allows us to trust in the safety and security of our money as we transfer funds.

Blockchain is a solution that also allows us to trust in the exchange of money, only the process works differently. The blockchain is referred to as a “ledger,” a series of records of validated monetary transactions, where the identical updated ledger resides throughout the peer network, not in one central location as under the traditional banking model. The system of blockchain is characterized by a few unique attributes that make this solution uniquely secure and positioned to transform many types of traditional business transactions:

  • Distributed: This describes the fact that the ledger exists throughout the blockchain network, and is not maintained in one central location.
  • Smart Contracts: We can think of this as an automated execution of a legal contract that governs the rules of each financial transaction.
  • Consensus: In order for each transaction in blockchain to take place, “consensus” prevents fraudulent transactions by ensuring the validity of each transaction and agreement between parties of the transaction.
  • Immutability: The record of a transaction in blockchain lives forever and it cannot be erased. The benefit of the inability to erase a transaction is that one single asset can be tracked throughout its entire life. In this sense, if a bitcoin were a dollar bill, the blockchain would track where and when the dollar was printed, who the first owner of that dollar was, and it would record every single date and exchange of hands along the blockchain, and none of these transactions could ever be erased.

Today, blockchain is a solution looking for problems to solve. The healthcare industry has high hopes for blockchain technology since interoperability, or the ability to securely share medical records across providers and patients, is the driving force behind many technology investments within healthcare. It’s widely believed that blockchain will be the technology that will form the basis of securely creating and sharing medical records that will solve many of healthcare’s current issues of siloed stores of data that lead to the delays and administrative burden of sharing health information. Designing an overlay of blockchain throughout the healthcare system reimagines a world without duplicate paperwork, inefficient payment systems, and delays in sending health records from provider to hospital, and these improved processes could all take place with a superior level of security.

Just as the internet was to 1992, so is blockchain to 2017.  We’re just getting started, and we can barely describe what is to come. This technology is indeed already transforming some industries, but in relation to identifying new ways it can enhance transaction security, prevent fraud, remove “middle man” fees, automate legal agreements, and increase the speed of information-sharing, we have yet to scratch the surface.

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If you are interested in exploring what blockchain means to the future of healthcare, banking, government and cyber-security, join us on November 29th at Salve Regina University in Newport, Rhode Island for Blockchain, Bitcoin and Crypto-Currencies – Is Your Organization Ready? organized by the Rhode Island Israel Collaborative.

Also for more information on blockchain and bitcoin, we recommend this succinct explainer video: Bitcoin Made Simple

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BetaXAnalytics is a healthcare consulting firm that helps payers and providers to maximize their CMS reimbursements and helps employers to reduce their healthcare spending through proven strategies to contain costs. For more insights on using data to drive healthcare, pharmacy and wellbeing decisions, follow BetaXAnalytics on Twitter @betaxanalytics, Facebook @bxanalytics and LinkedIn at BetaXAnalytics.

If you want to learn more about solving healthcare’s challenges, you may also like:

My Talk for TEDxProvidence

Dear Employer: High Deductible Health Plans Are Making People Sick

2 Reasons Why Your Data Is Lying To You

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