Paying more for less
As more attention focuses on prices, patients face bigger bills for fewer services
Healthcare prices, one flashpoint in the national debate over healthcare spending and access, have attracted heightened interest from researchers, the industry and Congress.
Prices have climbed, as has the household share of healthcare spending, for 1 out of 5 patients with insurance through an employer, newly released research shows. Those findings come as the effort to collect cash from patients has again focused national attention on how hospitals bill patients for medical care.
Meanwhile, Accretive Health, a company at the center of renewed controversy over how hospitals collect from patients, said it would push to establish national standards for how to communicate financial information. And a congressman reintroduced a bill with the backing of the American Hospital Association that would require states to promote disclosure of hospital charges and patient out-of-pocket costs.
Data released by the Health Care Cost Institute, a not-for-profit launched roughly one year ago, found prices increased in almost every one of 30 categories of healthcare services, from emergency room visits to brand-name prescription drugs.
The analysis included 3 billion claims for those younger than 65 with employersponsored insurance from Aetna, Humana, Kaiser Permanente and Unitedhealthcare. The data captured prices for hospital, doctor, laboratory and nursing home care between 2007 and 2010.
Price increases fueled overall growth in healthcare spending of 3.3% in 2010 compared with 2009, according to the institute. Use of healthcare services declined.
“It’s interesting how it looks like people are getting fewer medical services but they’re paying more over time,” said Chapin White, a senior health researcher at the Center for Studying Health System Change.
White said the growth in prices at a time
when healthcare use has flagged suggests that coverage through an employer is increasingly unaffordable. “This report is highlighting that people are paying higher and higher prices and getting fewer and fewer services,” he said.
The report also found out-of-pocket spending by patients, such as copayments and deductibles, grew faster than spending by insurers. Patient spending increased 7.1% compared with the 2.6% growth among insurers. Patients also ended 2010 responsible for a greater share of overall spending (16.2%) compared with the prior year (15.6%).
Efforts to estimate prices and collect money from patients at one Twin Cities health system have attracted national attention after Minnesota’s attorney general suggested a billing and collection company may have violated laws that protect consumers, privacy and access to emergency care.
Accretive Health, which has disputed the attorney general’s claims, lost its contract to handle billing and collections at Fairview Health Services amid the attorney general’s inquiry. Fairview last week said its board of directors, in a special meeting, did not renew the expiring contract for the system’s president and CEO, Mark Eustis.
Accretive Health’s share prices fell after the attorney general released her report, which claimed the company aggressively sought to collect medical bills from patients before or as they sought medical care. In response, the company said it would fund and establish a panel to identify standards for how providers communicate information to patients about prices and medical bills.
Accretive named Mike Leavitt, founder of the consulting company Leavitt Partners and former HHS secretary, to head the panel. An initial advisory group will meet in June to select an outside organization that will seek to expand the advisory group’s membership and solicit comment from the industry, patient groups and others, said Wayne Sensor, a partner and managing director for Leavitt Partners.
Sensor said Accretive provided seed money for the effort but anticipates others will help finance the standards development.
In Congress, Rep. Michael Burgess (RTexas), a physician, reintroduced a bill that would set a new standard for disclosure of consumer information by hospitals and insurers.
The bill, first introduced in 2006, would require states to enact laws that would require disclosure of hospital charges and compel insurers to provide estimated out-of-pocket costs to patients.
Megan Cundari, senior associate director for federal relations at the AHA, said the trade group supports the state-level mandates to allow local communities to enact laws that suit their needs.