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 Healthis 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 Monroneysponsored 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.