This article was first published April 17, 2015 at mainepolicy.org.
In nearly every business transaction, customers are fully aware of the costs they will incur before they purchase a specific good or service – but that isn’t necessarily true in the health care industry.
Patients are rarely, if ever warned of the costs of medical procedures, nor are they given estimates on how much a specific treatment will cost. Although the health of a patient is (hopefully) the primary concern, the economic well-being of a patient is rarely taken into consideration.
And if a patient asks a health insurance or health care provider about pricing, or attempts to shop for the best health care value, the motives of that patient are often questioned or criticized.
But a bill in Maine aims to change all of that.
LD 1305, sponsored by Sen. Whittemore (R-Somerset), would ensure that patients have a “right to shop” for affordable health care by directing health care entities to provide customers with a reasonable estimate on the cost of care.
The right to shop would also be made possible by requiring health insurance providers to establish 24-hour telephone hotlines and publically accessible websites that detail the costs of health care procedures.
Not only does the bill protect the right to shop, but it also creates a motivation to shop, by rewarding patients for purchasing affordable treatment.
Patients who receive a treatment or procedure that costs significantly less than the average price for that procedure will receive a payment from their insurance carrier that is 50% of the saved cost, up to a maximum of $7,500.
And if a patient receives less expensive treatment from an out-of-network health care provider, then the costs incurred by the patient are applied towards their insurance deductible, as if it was an in-network provider.
One medical practice in Maine that could have benefited from the right to shop, an out-patient endoscopy clinic in Waterville, previously offered care to uninsured patients at a lower cost than nearly every hospital in the state. By charging low rates while maintaining high standards of excellence, the clinic was able to serve cost-conscious and struggling patients who were looking to receive affordable health care.
But despite serving the Waterville community for several years, and having a reputation for delivering quality and affordable care, the clinic ultimately fell victim to the lack of right to shop and was forced to close its doors forever.
The number of private practices that referred patients to the endoscopy clinic had fallen sharply in recent years, due primarily to large hospitals buying-out or purchasing private practices all across Maine. While a private practice may refer a patient to any hospital or clinic, a practice owned by a parent hospital most often refers patients back to the owning hospital.
This trend doesn’t necessarily spell trouble for patients – but it did mean fewer clients for the endoscopy clinic as patients aren’t likely to question their doctor’s suggestion on where to receive care.
“Patients who don’t know [about right to shop] are simply going to follow their doctor’s recommendation,” says Matt Henrick, the former practice manager of the Waterville clinic.
“People are appalled that we aren’t in business anymore. But we need to start teaching the patient that they have a right to shop.”
Encouraging and protecting the right to shop is a logical step towards affordable health care – but predictably, insurance companies are not fully onboard.
They argue that providing patients with an estimate before treatment is not only difficult, but often times is impossible.
However, right to shop laws are already working in other states.
Massachusetts recently adopted its own version of right to shop, which similarly provides citizens with the freedom to obtain an estimate on the cost of medical treatments or procedures.
Not only was Massachusetts’ law successfully implemented, but it also helped establish infrastructure that could easily be adjusted to accommodate patients in Maine. All insurance companies in Massachusetts (many of which also operate in Maine) now have online web tools and toll-free numbers that allow patients and consumers to shop for the most affordable health care treatment. Expanding and altering these websites to include Maine rates would not be a significant burden or hardship.
LD 1305 is a move towards teaching patients that they have a right to receive the most affordable care, and ensuring that right is protected in all circumstance. It not only allows patients the freedom to know the cost of their medical procedures, but it also encourages transparency in the health care market.
Competition always benefits consumers, as businesses are forced to adjust prices and tailor their products and services to prospective consumers, or in this case patients.
But without transparency, and without patients knowing prices, there is a little incentive in a competitive environment for hospitals to lower prices or patients to shop for the most affordable care.
“Consumers lack access to basic information to spend their health care dollars wisely,” says Joel Allumbaugh, CEO of National Worksite Benefit Group.
This bill would increase transparency, protect the free market, allow consumers and patients to place downward pressure on health care costs, and push for affordable and economical alternatives.
The health and wellness of a patient should always be the primary concern in a health care environment. But economics and cost-effectiveness must also be taken into consideration, and patients should not have to settle for expensive procedures without having any other options.
As Allumbaugh says “the right to shop initiative puts the interest of Maine’s consumers first while rewarding efficient, high value health care providers in our communities.”