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Congress Takes Up Debate over 'Shopping Around' for Health Care

MARCH 15, 2006 -- If it's good enough for cars why not health care? House lawmakers Wednesday debated whether giving consumers health care cost information would make it any less expensive or change patients' consumption of health care services.

Proponents of the concept, known as "price transparency," say that giving consumers information about the quality and cost of medical services will help them make better choices and save money. Price transparency is also a critical element of the administration's plan to expand the use of health savings accounts (HSAs), which allow consumers to contribute money tax free to the accounts for use on health costs if they also buy a high-deductible health insurance plan.

Critics of transparency and HSAs say it will take a lot more than a price list to tackle tough issues such as rising health care costs and providing coverage to millions of uninsured Americans.

"Instead of a marketplace, we have a system that prevents patients from seeing how much their health care services actually cost. The health care system hides prices and it blurs quality," House Energy and Commerce Chairman Joe L. Barton, R-Tex., said as the panel's health subcommittee began its hearing into the issue.

But transparency in health prices "is no substitute for real coverage," said Rep. Henry A. Waxman, D-Calif., adding that individuals get the best prices when they are part of a group policy, rather than trying to cut their own deal. Waxman and others also said the movement toward transparency in health prices may prove to shift more health costs on to the consumer.

While much of the discussion on transparency is focused on hospital pricing, several Democrats on the subcommittee said the concept should be expanded to insurers and pharmaceutical manufacturers to help consumers fully understand how much health care costs.

"Two health care sectors are largely responsible for the dramatic increase in health care costs: hospital services and prescription drugs. We shouldn't treat one like a sinner and the other like a saint," said Rep. Sherrod Brown of Ohio, the panel's s ranking Democrat.

"Disclosing prices to consumers is a good thing, particularly if it is extended to prices for pharmaceuticals and for health insurance companies," said Rep. John D. Dingell, D-Mich.

Health policy experts testifying at Wednesday's hearing wrestled with the many complexities surrounding the price transparency issue. Why do many health care providers not make their prices public? Will providing pricing information make a difference if it's too complicated for consumers to understand and use? Also, what happens when providers make the decisions about what services a patient needs?

"Consumption of health care does not work like a trip to the grocery store," Dingell said. "You do not always know what items you need, or even what items are available. And, more often than not, someone else, such as your physician, is by necessity selecting the items going into your shopping cart."

Former House Speaker Newt Gingrich, R-Ga., (1977-99) called the current health care system "a hopeless mess" in need of overhaul. Giving consumers more information about what health care costs, he said, is the first step toward changes that will save lives and money.

"Outside of health care, we live in the world of Expedia, Travelocity, Craigslist, and Consumer Reports. Within minutes, any citizen can find price, cost, and performance data on an infinite number of products and services," said Gingrich, founder of the Center for Health Transformation, a Washington, D.C. think tank. "Health care is the only area of America's economy where the consumer and the provider have no idea what the good and services they trade cost."

But some analysts "are overselling the magnitude of this potential," said Paul B. Ginsburg, president of the nonpartisan Center for Studying Health System Change. "Consumers' experiences with markets for self-pay services, such as LASIK (eye surgery), have been romanticized and do not offer much encouragement as a model of effective shopping for health care services without a large role for insurers or regulation."

Separately Wednesday, the group Consejo De Latinos Unidos, which describes itself as a advocacy group for uninsured patients, announced it would begin a direct mail campaign with hospitals around the country in an effort to get the facilities to offer uninsured patients the same payment rates that managed care plans receive.

Some hospitals—in particular those with nonprofit tax status—have come under fire for charging their uninsured patients higher rates than those who have insurance. "Our main objective is to bring to an end the ugly era of hospital price gouging of the uninsured and restore public confidence in the hospital sector," said K.B. Forbes, the group's executive director.

Alicia Mitchell, a spokeswoman for the American Hospital Association, said the steps Forbes outlined Wednesday reflect "many of the things hospitals are doing to help the uninsured," such as training staff to help uninsured patients understand if they qualify for discounted pricing programs or charity care.

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