There is a new healthcare product on the market in Michigan
and it could end up saving consumers thousands of dollars, according to the
vendor. And it’s almost deceptively simple in its design.
The Healthcare
Blue Book aims to do for healthcare what the Kelley Blue Book did for used car shopping: allow you to compare prices before you
buy. The Healthcare Blue Book identifies the prices of more than 200 medical
procedures—from surgeries to imaging tests. So says the product’s vendor,
Priority Health.
Priority Health
is a non-profit health plan in Michigan. Their Blue Book uses Priority Health’s
contracted provider fees to figure out what Priority calls a “fair price” for
healthcare services. The product evaluates prices throughout Michigan based on
whether they are fair, more expensive than fair, or below the fair benchmark.
Like it or not, we’re all consumers of healthcare. The older
we get, the more we consume. One of the reasons we’ve let healthcare get so
expensive is that we’re not savvy shoppers.
There’s no reason shopping for healthcare should be any different than
shopping for a car.
Until the late 1950s buying a new car was a mystery to most
people. A buyer had no clue what the car cost to make, what the manufacturer’s
markup was, and how much the dealer made. A buyer was just guessing when he
negotiated with the dealer, who held all the cards.
In 1958 Oklahoma Senator Mike Monroney
sponsored the Automobile Information Disclosure Act of 1958. The
law required car manufacturers to post the suggested retail price of the car on
the vehicle. It was a start. Consumers could at least know what the
manufacturer thought the car was worth. Salesmen in bad suits and loud ties
could no long lard up the price with secret dealer markups.
Eight years later a publisher named Edmund’s began publishing
quarterly guides with car purchasing information: list price, markup, cost of
options and other data. If you knew about Edmund’s you could negotiate a fairer
price because the dealer was no longer the only one at the table who knew what
things actually cost.
In the mid-1990s, Edmund’s took its information to the
Internet and forever changed the way people buy and sell new cars. Now both
parties—buyer and seller—had the same data. Car buying became less about
pulling the wool over buyers’ eyes and more about working professionally with buyers
to find the right car at the right price.
Products like the Healthcare Blue Book have the potential to
shine a light in the dark recesses of healthcare—the Finance Department—much
like Sen. Monroney and Edmund’s did for buying a new car.
In a technology-driven world we often want the Big Solution. The sexiest, most technical, most awe-inspiring solution to a problem. It’s
that way with healthcare. I don’t think that health information exchanges, ACA, ACOs, HIEs or any other alphabet soup solutions will
necessarily get us to the level of healthcare reform we need.
I think that small, incremental, common-sense steps like establishing
pricing transparency with products like the Healthcare Blue Book, restoring
cuts to tax-free savings for medical expenses, making insurance truly portable from job to job, medical liability reform, health
savings accounts, and selling insurance across state lines to increase
competition have to be part of any solution.
As I tell my kids, take care of the little things. If you do
that the big things usually take care of themselves.