May 25, 2009

Price Transparency in Boston

In a time when tightening belts and pinching pennies has become especially important, patients too often pay exorbitant amounts—enough to bankrupt two million American families a year—on medical care they may not even need.   

Patients will spend hundreds of dollars on a medication they are prescribed, even when a generic version is available that contains the exact same stuff and is 90% cheaper. Patients might pay thousands of dollars for an MRI, even when its results are unlikely to be informative. According to the Congression Budget Office, tests and treatments that do not improve health outcomes add up to an impressive total: $700 billion each year, the same amount we have spent on the entire Iraq War.

One of the reasons for this is painfully simple. Information on the prices patients face is rarely available to doctors when they are deciding which tests and treatments will go on the bill. A 2003 American Medical Association study showed that fewer than one in five doctors understands how much their patients pay for care.

In Boston, we are piloting a project called Costs of Care, that will harness information technology to give doctors information on the prices their patients face at the critical moment when medical decisions are being made.  

We believe that doctors who are cost-aware will be less likely to inflate medical bills unnecessarily. You can support our efforts by becoming a fan on facebook or by following us on twitter.


AKS said...

Cool idea, Neel. It's one those things you read about and think, "You mean, we haven't fixed that yet?!?" A long time coming -- for all our sakes, let's home you're successful.

MLee said...

Hey Neel, great blog, this is a truly important topic. But most people (the 80% that have insurance) don't pay for the bulk of their care -- insurers do. Sounds like the issue is getting them to not pay for truly "unnecessary" procedures, tests or drugs. Giving docs more information on prices without changing the reimbursement scheme could also have the unintended effect of raising costs by increasing their price-setting power vs insurers.

Dori said...

"The most important piece of medical equipment is the doctor's pen" says the New Yorker. Even for those with insurance, doctors may not realize their role in skyrocketing health costs. This is a simple and politically viable solution to a major problem--great work.

Devin said...

It's a shame that it took a global credit crisis, soaring fiscal deficits / aggregate debt levels, and a swelling unfunded health care liability to finally wake up administrators and practitioners to the unsustainable reality of the situation Neel describes. In this age of information and technology, where doctors make 90% of health decisions on behalf of their patients, it only makes sense to provide them with targeted decision support designed to achieve the best possible health outcomes at the lowest possible cost. If the pilot works as I imagine it will, this initiative and similar programs could help chip away at the $700 billion in annual waste identified by the CBO and reallocate those resources toward more pressing fiscal priorities.

Eva said...

Baucus is talking about is, Obama is talking about it. Health care reform means taking a good look at cost. If you haven't read it already, do take a look at Atul Gawande's piece in the New Yorker: The Cost Conundrum.