Insurers must be specific about payment information

If consumer-directed health care is going to work, insurers need to make more accurate information about pricing available to patients and their physicians.

Editorial. Jan. 2/9, 2006.

Information is the watchword for the nascent era of consumer-directed health care. If a patient is to have more control of health care spending, what's needed is truly meaningful cost information when considering treatment options with the doctor.

Health plans are beginning to offer such information by posting procedure charges online, accessible only to plan members. Plans are posting the prices in part because of perceived consumer demand. The plans also have agreed to do so as part of their settlement of the physician class-action lawsuits over how plans pay doctors' fees. Whatever the reason, such posting of prices is a good first step in letting consumers know what procedures might cost.

But it's only a first step.

That's because patients are likely to find price information online that is not wholly accurate or not nearly as useful as it could be.

A health plan site might list how much it costs, in general, to set a broken arm or receive heart surgery. But the prices aren't broken down in any meaningful way.

Plans typically post what's essentially the maximum charge for whatever service a physician might provide. What a patient-as-purchaser really needs to know is what their own out-of-pocket costs will be, based on what the health plan actually would pay.

To help rectify that situation, the AMA House of Delegates in November 2005 directed the Board of Trustees to report on how to make truly useful information readily available to enrollees and their treating physicians. The report is due to be delivered in June at the AMA Annual Meeting.