How much are you paying for health care? You may say too much, you may even cite the cost of a recent procedure you’ve had, but do you know what the actual cost of care is? More importantly, do you know if it’s fair?
Many North Carolina families are one major medical bill away from bankruptcy, yet we don’t know what we’re paying for. Hospital executives keep health care costs secret because they know when we’re sick and at our most vulnerable, they can charge whatever they want. What choice do we have?
We deserve to know if the bill that stands to jeopardize our family’s future is inflated. We deserve to know if we’re being overcharged to pad high-paid hospital executives’ profits. We deserve quality, affordable, transparent care.
Reform starts by changing the way we pay for care in the State Health Plan. We can bring transparency to a system that has been shrouded in secrecy, stabilize costs that have spiraled out of control, and hold providers accountable to the taxpayers and patients who pay the bills.
It’s called the Clear Pricing Project, and it will finally give patients back the power hospital executives took away.
The Clear Pricing Project will save taxpayers $300 million annually, reduce out-of-pocket costs for state employees, teachers and retirees, and help patients understand exactly what they’re paying for.
Clear pricing works by setting payments for procedures relative to a widely-used benchmark and adding a margin to ensure that providers can make a profit. In this case, the State Health Plan will reimburse providers at Medicare rates plus a 77 percent markup.
It’s not a new or radical approach.
The State Employees Association of North Carolina proposed this payment methodology nearly a decade ago to help save money for our members and other taxpayers.
Clear pricing is gaining support because it has been analyzed, tested, and proven effective.
North Carolina began using it in 2010. Hospitals provide care for workers’ compensation claims at Medicare rates plus a 40 percent margin. In the decade since, hospital executives haven’t raised profitability concerns.
Many self-insured plans across the country, both public and private, have turned to this method.
For these reasons and more, the SHP Board of Trustees voted unanimously to endorse its implementation.
The Clear Pricing Project will help lower costs, keep them stable, and make them easy to understand.
So why are hospitals executives opposed to clear pricing?
For far too long, hospitals have billed their procedures at arbitrary prices with arbitrary discounts. The practice leaves consumers guessing about the true value of their care while hospitals dodge accountability and rake in profits.
Atrium Health announced that CEO Gene Woods received $6.1 million in compensation in 2018. In 2017, Atrium’s top 10 executives took home $21 million. Gene Washington, Chancellor of Health Affairs at Duke Health, pulled in $2.2 million in 2018. Vidant Medical Group CEO Mike Waldrum made $1.2 million last year.
One aspect of our healthcare system is perfectly clear: Hospital executives profit from confusion.
These executives should have the burden of proof — not the benefit of the doubt — in our healthcare cost debate. They are the ones who need to answer difficult questions about why their costs are out of control.
Without transparency, hospital executives’ claims of financial hardship are just that—claims from bureaucrats who have everything to lose when patients—and taxpayers—save money.
Robert Broome is the Executive Director of SEANC, the Southeast’s largest state employees association.