Thursday, May 9, 2013

Fwd: qotd: CMS pushes price transparency

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: CMS pushes price transparency
Date: Thu, 9 May 2013 12:08:03 -0700
From: Don McCanne <>
To: Quote-of-the-Day <>

Centers for Medicare and Medicaid Services
May 8, 2013
Administration Offers Consumers an Unprecedented Look at Hospital Charges

New data released today show significant variation across the country
and within communities in what hospitals charge for common inpatient

"Currently, consumers don't know what a hospital is charging them or
their insurance company for a given procedure, like a knee replacement,
or how much of a price difference there is at different hospitals, even
within the same city," Secretary Sebelius said.

These amounts can vary widely. For example, average inpatient charges
for services a hospital may provide in connection with a joint
replacement range from a low of $5,300 at a hospital in Ada, Okla., to a
high of $223,000 at a hospital in Monterey Park, Calif.

"Transformation of the health care delivery system cannot occur without
greater price transparency," said Risa Lavizzo-Mourey, M.D., RWJF
president and CEO.

Medicare Provider Charge Data

Comment: So now we have access to hospital chargemaster prices -
meaningless numbers that nobody pays. And that is going to make us
better health care shoppers?

What matters are payments, not prices. Actual payments are negotiated
prospectively by private insurers, and even more effectively by
Medicare. Cash paying patients usually feebly attempt to conduct
negotiations retroactively, if they pay at all.

This CMS effort on hospital price transparency will have almost no
impact on controlling total health care spending since chargemaster
prices are a fabrication.

There is a far better way to control spending without forcing patients
to make unwise health care decisions in their efforts to avoid the
financial burdens of health care. Each hospital should be placed on a
global budget, just as we do with our police and fire departments. That
way, services are rendered simply when needed, without having an
associated price tag.

Requiring price shopping as a prerequisite to health care access is
anathema to health care justice.

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