Healthcare Costs 'An Abomination' Says Senate Finance Committee Chair

Margaret Dick Tocknell, for HealthLeaders Media , June 19, 2013

A Senate committee session in which expert witnesses discussed healthcare costs, hospital prices, and data transparency ended with a plea from the chair, Sen. Max Baucus, for "specific recommendations" from "anyone."

The Senate Finance Committee spent more than two hours Wednesday discussing the relationship between healthcare costs and transparency with a panel of witnesses that included Steven Brill, the author of a March 2013 Time magazine cover story titled "Bitter Pill: Why Medical Bills Are Killing Us."

Brill proved to be a provocative witness and directed much of the discussion. Throughout his testimony and during the question and answer period, he often took direct aim at the chargemaster, or what some call the "sticker price" for the 100 most common Medicare inpatient diagnostic related groups or DRGs.

"No one can explain anything about … the chargemaster, which all hospitals have but which vary wildly, hospital by hospital, and have absolutely nothing to do with quality. Nor can anyone explain why the chargemaster's sky-high list prices are charged mostly to those least able to pay, the uninsured or the underinsured."

See Also: Kill Your Chargemaster

"And no one can explain why the discounts that insurance companies pay to hospitals and other providers off of the chargemaster vary so wildly, which, of course, affect that co-payments and deductibles paid by patients lucky enough to have insurance."

He cast the chargemaster as a metaphor for the entire healthcare system. "It's irrational; it's completely unaccountable; and the prices are just way too high."

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4 comments on "Healthcare Costs 'An Abomination' Says Senate Finance Committee Chair"

A. Duane Seabury (6/19/2013 at 3:58 PM)
Senator Baucus, I have been in healthcare for more than 35 years. The biggest problems have been created by Congressional action with no understanding or appreciation of the healthcare industry. Like the post office and social security, Congress is "managing" us right out of business. Decision one needs to answer the questions of fee for service or socialized medicine. You can't have it both ways. Once that question is answered then steps can be taken to make it happen. Look at the history going back to Medicare's initiation; take a hard look at Hill Burton; dissect the Medicaid program and at least try to understand the route that was taken by Congress to deliver us to this point. You need to be speaking to healthcare "experts" without skin in the game and you need to show the insurance lobbyists to the door. Oh...while your at it, take some time and actually define the calculations that will be the standard for quantifying and discussing "costs". So far, I haven't seen anything more than a broad brush on "rising healthcare costs".

Will Aclin (6/19/2013 at 2:33 PM)
It's true that nobody actually pays chargemaster rates, but hospitals have no problem billing those rates to uninsured folks and then creating financial chaos when they can't pay. While people with good insurance pay next to nothing for the same services (and their insurance company negotiates a rate less than a third of the chargemaster rate). The 2 major negatives about the chargemaster for me are these: 1) it's good at creating unnecessary financial chaos for the uninsured, and 2) these are the same "rates" that get applied to "Charity Care" reports for US hospitals (for-profit and non-profit). Doesn't seem quite right if you ask me.

Amanda Holt (6/19/2013 at 12:38 PM)
The "chargemaster" concept has become an irrelevant price list and it's "transparency" is only causing consumer concern and distrust of health care providers. You call for transparency? Then why don't insurance company's divulge their contractual rates to their participants so insured individuals can see exactly what their monthly premiums are NOT paying for? Why don't we fix the system so insurance companies actually pay for services and supplies that are rendered based on geographical costs of providing care rather than forcing providers to keep ramping up the "chargemaster" in the hopes of getting sufficient payment for service - if they get payment at all? CMS is the lowest paying institution and, yet, they have the most control over health care functions and regulations? How has our capitalist society allowed this to happen?




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