Thursday, February 27, 2014

You can price shop for medical care

I'm tired of listening and reading people who think that medical pricing inhabits a strange universe all by itself. It doesn't.

Medical pricing involves two distinct scenarios, emergency and non-emergency care. Those who think that market pricing matters tend to concentrate on non-emergency care. The markets have time to work there and the results are good. Elective procedures where insurance doesn't cover the cost tend to have price trends going down as cost saving techniques are invented. If enough procedures have this pricing trend, the cost curve for the totality of medicine will also tend to go in the same direction.

Then there's the time-sensitive sector of emergency care. Emergency medicine is very expensive, will likely remain very expensive, and is only indirectly influenced by pricing pressures. Seconds count and the give and take of price bargaining is almost entirely absent.  Whenever market pricing opponents talk about medicine, this is the sort of medicine they think about and so far as it goes, they have a point.

But even in emergency medicine, there are ways to reduce cost. A large number of the codes they bill on are used both in emergency and non-emergency settings. By forcing down the prices in the non-emergency settings, the emergency charges necessarily are reduced. Also, there's a big opportunity in reducing the inappropriate use of the emergency room for non-emergency care. Stick a 24 hour urgent care facility next door to the emergency room and give them a common entrance with a gatekeeper and a great deal of waste goes away. Keep a bulletin board of primary care doctors accepting new patients on the urgent care side and even more money will be saved.

Some of these measures are already happening in dribs and drabs but more could be done if we didn't have a large part of the country convinced that you can't price shop.