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Higher Price, Better Healthcare?

October 26, 2020

In this blog, Hugh Greeley puts forth the question of the cost differentials in healthcare services across individual providers and organizations. With the advancement of healthcare services coding assignments, ease of data access and dissemination, the reality of accurate and real-time price transparency correlated with outcomes is gaining ground.

Healthcare tourism became popular when Central and South American countries were offering dentistry and cosmetic surgery at a fraction of the cost of having the same services done in the U.S.

We may be at a point where healthcare consumers will shop across state lines to receive reasonably priced care with trending good outcomes.

As the New Yorker article mentioned in the next paragraph points out, healthcare costs can vary by up to 300 percent from state-to-state or even county-to-county based on disclosure by federal entitlement program reimbursements. Private health insurance companies are not required to disclose coverage ratios and reimbursement details to the public.

Hugh proposes the idea that providers disclose their pricing methodology to the hiring hospital as part of the credentialing process. At a minimum, pricing would be transparent and consistent within one health system.

The following is contributed by Hugh Greeley, author of Hugh’s Credentialing Digest

While attending a small conference of CEOs and other hospital managers, I overheard one CEO ask another, “How are your finances?” The response was, “Not so good. It’s tough!” To that, the first suggested in absolute jest, “Oh, you could solve that by getting a few of those McAllen docs on your staff.”  This brought a few laughs from around the table. For readers who may not have read about “those McAllen docs” in 2009 and again in 2014, you may wish to click here and read a thought-provoking New Yorker piece about them.

This was a short exchange, but it triggered a thought about our credentialing activities and the moving standard for due diligence. Remember when hospitals could not easily verify licenses, so we asked for a copy? Remember when it was difficult to verify past malpractice payouts and disciplinary actions, so we would ask questions and hope the responses were accurate? Remember when conducting a criminal background check was unheard of? Remember when we settled for a letter of reference instead of a questionnaire? Remember when we did not have Google?

Data Accessibility for Provider Transparency

With the advent of easy online accessibility of such data, the general standard for credentialing moved up a notch. Today no one would omit a National Practitioner Data Bank (NPDB) check, a swoop through the Office of the Inspector General’s sanctions list, or a check with the authorities about criminal actions. In a few organizations, there is now an expectation that sources such as  be included in the credentials package. Is there now another source of data that we may soon tap into in order to demonstrate that we know at least as much as the patient about our appointed practitioners?

The answer may be yes. The Centers for Medicare and Medicaid Services (CMS) releases data on nearly a million doctors and other healthcare providers, including Medicare volumes and payments, received. The design for releasing this data was to provide healthcare consumers with information about the type of healthcare services delivered and the amount Medicare paid for those services. Healthcare consumers are entitled to make informed decisions about the care they receive

With the accessibility of this data, which prior to 2014 was not made available to the public, will hospitals begin to access the information as part of their evaluation process for prospective employee doctors? And, if so, will this then become the general practice for all applicants to the staff? In essence, will hospital boards and credentials committees want to know, in advance of an appointment decision, if an applicant is at the 90th percentile for both volume and cost of Medicare services? Only time will tell, but it is likely that the “law of unintended consequences” may again be at work. As hospitals face ever greater pressure to control both utilization and cost, some will attempt to carefully determine if an applicant has demonstrated a past pattern of high usage of certain services.

Verisys streamlines screening and monitoring for malpractice and false claims giving real-time transparency on provider activity

Physicians and healthcare delivery organizations set pricing for services that vary depending on the method of reimbursement. There is often different pricing between what is reimbursed by a state or federal entitlement program such as Medicare, and that which is reimbursed by a private or commercial health insurance company.  That said, it is becoming common for healthcare delivery organizations to disclose pricing on their websites or will give pricing at the time of scheduling a service. With this emerging convention, it may be the healthcare consumer who is a key participant in mitigating healthcare fraud, waste, and abuse because the patient will hold the provider and organization accountable.

Some of the high cost of healthcare is due to the fact that some 10 percent of all state and federal healthcare spend is lost to fraud, waste, and abuse—that’s some $6 billion annually. And that figure doesn’t reflect commercial payers.

One of the key indicators of fraud is in malpractice and false claims. Verisys provides data on malpractice and false claims to healthcare delivery organizations and payers as part of ongoing monitoring through its proprietary database, FACIS® as well as more than 5,000 additional primary source publishers.

Learn more about how Verisys can help protect health systems from fraud while protecting patients and reducing the cost of healthcare.

Hugh Greeley Written by Hugh Greeley
Credentialing and Healthcare Industry Expert
HG Healthcare Consultant
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