The Other Kind of Healthcare Reform

The drama we’ve been watching in Washington may go by the name “healthcare reform,” but it’s really about health insurance. Another kind of healthcare reform would be to address the inefficiencies in the larger US healthcare system to bring cost down for everyone. A good place to start? The huge variations in the price of healthcare services

A new study published in JAMA found especially sharp discrepancies in emergency room charges, which on average charge four times the Medicare reimbursement rate, with some charging as much as 12 times. Not surprisingly, the study found that the hospitals that treated more uninsured and Medicaid patients had the steepest charges. Yes, that means employer plans were making up shortfalls – something to think about as lawmakers consider Medicaid cutbacks. What’s interesting is that there’s an ongoing example of the good that can happen when providers must charge everyone the same rate for the same services. In the state of Maryland, prices are set by an independent agency. Under this “all-payer system,” providers have incentives to reduce readmissions, which have dropped faster in Maryland than elsewhere in the country. The ACA included some payment and delivery system reforms. In the race to repeal and replace or repair, how about giving those another look?

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Beth Umland
by Beth Umland

Director of Research, Health, Mercer

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