Patients get what they pay for

Do you ever wonder why it seems health care providers have only recently discovered the 1990s, at least in terms of the technology they use to interact with consumers? I do.

Consider these two startling statistics:

– Still today, less than one-third of physicians and nurse practitioners communicate with patients through e-mail.

– One-third of physician practices do not accept credit card payments. Because of that fact, UnitedHealthcare, the nation’s largest health insurer, recently created a web portal to allow its customers to make credit card payments even for doctors that don’t accept them.

UnitedHealthcare’s myClaims Manager tool is a first for the industry—even though a UnitedHealthcare spokeswoman told me the announcement sounds like something from 2003.

There are two major reasons for why health care providers lag the rest of the world on the adoption of the technologies customers prefer. One is the fact that health care is a highly regulated sphere, where the fear of violating privacy laws chokes off numerous innovations that occur easily elsewhere.

But another, which I’m going to focus on today, is financial. Patients, in spite of what it may feel like, pay only a tiny fraction of the total health care bill directly from their own pockets.

In fact, only 10.5 percent of all health care bills are paid for out of pocket, according to data from the Centers for Medicare & Medicaid Services.

That means, in the eyes of health care providers, patients are patients, not customers. The customers for health care providers are the health insurers and, through them, employers.

That’s why, for the most part, doctors and hospitals do not even try to compete based on price and service, as we’re accustomed to most other businesses doing.

If you have to wait 45 minutes past the time of your appointment to see a doctor, the doctor’s office is only mildly concerned. It’s not like you’re going to refuse to give them a tip or walk out the door and try the doctor’s office down the block. And even if you get so angry you refuse to pay your bill, your health plan still pays the doctor most of what he or she was owed anyway.

Your doctor has no financial reason to communicate with you by e-mail because doing so is entirely unpaid time. Doctors who use e-mail with patients are actually engaging in a form of charity care.

Neither doctors nor hospitals have incentive to make prices available to you, and have at best given tepid support to price transparency companies like California-based Castlight Health or Tennessee-based Healthcare Blue Book.

Health insurers are little better. For years they steadfastly resisted making accurate price information available by provider, for fear that doing so would allow their competitors to use it against them in competing for contracts with health care providers and employers.

That’s starting to change, but only because employers have started to pressure their health insurers to do so.

It took more than a year of requests from the largest employers in Indiana before Indianapolis-based health insurer WellPoint Inc. finally agreed to work with Castlight to provide accurate price information to those employers’ workers.

Employers have also been greatly increasing the percentage of medical bills that their workers have to pay, primarily by using high-deductible health plans. A study by the American Medical Association released in June found that 23.6 percent of all medical bills paid by private health insurers—not the Medicare or Medicaid programs—are now paid for by patients with out-of-pocket funds.

"Physicians want to provide patients with their individual out-of-pocket costs, but must work through a maze of complex insurer rules to find useful information," said Dr. Barbara McAneny, a board member of the American Medical Association, in a prepared statement. "The AMA is calling on insurers to provide physicians with better tools that can automatically determine a patient's payment responsibility prior to treatment."

None of us likes to have health insurance that pays for less care. But when it comes to the service and price transparency we expect, we get what we pay for.

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