I’ve been reading through Grand Rounds over at Med Page Today, compiled by Dr. Val Jones. There are lots of great articles, but a discussion about usual, customary, and reasonable charges written by David Williams at Health Business Blog caught my attention. In particular, this point:
“A big problem is that a lot of the “usual and customary” charges are not “reasonable.” There is huge variation in pricing for no logical reason.”
Exactly. Prices vary from one region to another, and even within a single metro area. Health insurance companies agree to different negotiated fee scales for the same procedures in the same towns. Jay saw two local physical therapists last year for rehab on his knees. We had the same health insurance the whole time, and both therapists were in network. But although they both provided the same services, they billed two different amounts and were reimbursed two different amounts.
There’s heated debate at every turn these days when it comes to healthcare reform ideas. Those opposed to any additional government intervention in healthcare claim that such intervention would kill the free market setup we currently have. But the concept of free market requires quite a bit more transparency in pricing than we have in our healthcare system. Pricing varies dramatically from one provider to the next; negotiated reimbursement rates vary even within a single health insurance network, and patients often don’t know what the price will be until after the fact. And as David Williams pointed out, the prices are often far from reasonable. When a non-essential commodity is overpriced, I can live with that. If I think the price is too high, I can do without the tv or the car. But how do we do without healthcare? We can’t, and that’s why unreasonable “reasonable and customary” charges exist.