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Transparency of health care costs

Background
The quality of school staff is enhanced when teachers and education support professionals are part of decision-making over important issues such as health care options. WEAC is a strong advocate for promoting health care reform that improves the quality of information used for making wise health care choices.

A sad but true fact about the current health care system, however, is that neither doctors nor their patients know how much medical procedures cost and have little idea about how much a patient’s health plan will pay for any given procedure.

Simply stated, the system is broken.

Medical fee schedules from one provider to another vary widely. Worse yet, the amount one patient is charged is often far more than another patient is charged for the same procedure, the same doctor, and performed the same day. Comparison-shopping is virtually impossible. But the system can be fixed — and without fixing prices.

Legislative history
Legislative solutions to fix the health care system must focus on controlling rising costs. Unfortunately, recent attempts at health care reform by some legislators have focused on taking public employees out of decision-making over group health carriers.

Many of these reform ideas only reduce information and choices for workers and do not promote health care cost containment.

WEAC position
WEAC supports legislation to control health care costs while protecting employee bargaining rights. A healthy collective bargaining process that produces agreement on employee health benefits is a far better path to take to achieve the cost savings that all parties seek in health care coverage.

Cost effectiveness in health care solutions is partially the result of using good data to promote the wise utilization of benefits by workers. To achieve this cost effectiveness goal, any reform measure must promote greater transparency of health care costs.

WEAC supports legislation that would offer three key reforms:

First, just as Medicare and Medicaid publish relative value fee schedules that apply to all medical providers, the state could publish a relative value schedule upon which all providers must base their charges.
Second, providers would be required to charge every patient the same amount for their services, but they would be free to declare the percent of the state schedule at which they will set their fees (e.g., 90%, 100%, 110%) for each procedure.
Third, insurers and health plans would be required to set the amount they reimburse as a uniform percentage of the schedule. In this way, cost shifting, which adversely affects Wisconsin small businesses and residents without insurance the most, would be eliminated. More importantly, both patients and their doctors would know, in advance, what medical services cost and what a patient’s health plan will pay for.

Talking points

The quality of a school staff is enhanced when teachers and education support professionals are part of decision-making over issues such as health care options. One reason that Wisconsin has such high-quality school staff is the fact that it has been involved, through collective bargaining, in decisions over health care. Health care cost containment measures must promote the wise utilization of worker benefits and preserve the strong tradition of bargaining local health care benefit decisions.
Transparency will help to make the health care system fairer and more competitive. By eliminating cost-shifting and making public the cost of medical services, health care consumers will be able to comparison shop.
When information regarding cost is paired with data on quality and safety, patients and their doctors will be able to better evaluate the value of high-cost services. This will help school district employees make wise health care decisions that, in turn, will reduce costs for themselves, their families, local school districts and taxpayers.
Transparency will help re-establish the link between the use of services and cost. When consumers are aware of the cost, they are less likely to seek higher-cost treatments such as using the emergency room for conditions that can be treated in a doctor’s office.
Transparency will help change how health care is purchased. When cost and quality data are available to health care consumers, they will be able to make informed health care decisions based on quality and price.
By shining light on health care costs and by eliminating cost shifting, we will create a more open and transparent health care marketplace.

Additional information
Contact Bob Burke at WEAC at 800-362-8034 ext. 254 or by e-mail at burkeb@weac.org with any reactions, comments or questions.

Posted March 30, 2004