Competitive Bidding for Medical Services
I recently received this email from a concerned reader:
Anne:
I would be interested in hearing how other office are handling the following situation.
We are constantly getting requests from 3rd party carriers who are working with the insurance carriers to renegotiate fees. We have our own MRI and constantly get asked to sign contracts. Our providers are feeling that the insurance companies are sending patients to the lowest bidder. I would be curious to hear how other practices are handling this.
Kathy
Practice Admin
Thanks for your email, Kathy. On the face of it, bidding for the lowest costing service sounds like a good plan. In a capitalist market, the company that offers the best price should win out. Legislators love the simplicity of this argument when it comes to something like Medicare, because it makes them look like they are doing something for the consumer.
Unfortunately, I don't think medicine is helped by this practice. First of all, to streamline a system of healthcare to this approach costs money, and the bureaucracy it creates isn't cheap. Also, once it's determined that someone offers a service for less, the patient is usually not given any other choice.
As with many things, cheaper isn't necessarily better when it comes to healthcare. There are often legitimate reasons for increased cost, and also for letting the marketplace determine the value of something, not some bureaucrat trying to save a dollar. The favoritism that causes some services to be more lucrative is a form of rot, potentially causing other less profitable procedures to be eliminated or harder to receive.
If insurance companies in the U.S. have proven anything conclusive, it's that money decides healthcare policy, even under the guise of saving it. In the end, competitive bidding is a misnomer. It may simplify things, but it doesn't make them better.
But that's just my opinion. I would be interested to hear what other readers have to say. As always, dissenting points of view are encouraged.
posted by Anne @ 6:22 PM
3 comments
3 Comments:
Your competitive bidding article was right on the money. Everyone except the insurance payers forget the old adage, "you get what you pay for"....and in healthcare, that is a dangerous and slippery slope down to poor care, rationed care, withheld care and denied care. Buyer beware.......these same insurance payers who are trying to low ball reimbursements to healthcare providers, are the same companies who want to "measure quality services and healthcare provided" by the same caregivers who are being reimbursed at 33% below actual costs.....I should know, I see it everyday....AND, watch out for those "Medicare Advantage" plans.....they come with a very high price tag.....20-30% co-insurance for all but the most simplied care.......
Kudos to you for taking the time to research and write a piece that is so spot on. Personally, I have a real aversion to this practice.
I work for a health plan which does not follow this practice. We credential the providers and the facility to insure they meet standards. We limit the number of contracts for speicific services as we prefer to identify a provider which works cooperatively in coorinations of care and quality stantards and direct a higher volume to that provider.
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