Insurers must be specific about payment information

Information is the watchword for the nascent era of consumer-directed health care. If a patient is to have more control of health care spending, what's needed is truly meaningful cost information when considering treatment options with the doctor.

Health plans are beginning to offer such information by posting procedure charges online, accessible only to plan members. Plans are posting the prices in part because of perceived consumer demand. The plans also have agreed to do so as part of their settlement of the physician class-action lawsuits over how plans pay doctors' fees. Whatever the reason, such posting of prices is a good first step in letting consumers know what procedures might cost.

But it's only a first step.

That's because patients are likely to find price information online that is not wholly accurate or not nearly as useful as it could be.

A health plan site might list how much it costs, in general, to set a broken arm or receive heart surgery. But the prices aren't broken down in any meaningful way.

Plans typically post what's essentially the maximum charge for whatever service a physician might provide. What a patient-as-purchaser really needs to know is what their own out-of-pocket costs will be, based on what the health plan actually would pay.

To help rectify that situation, the AMA House of Delegates in November 2005 directed the Board of Trustees to report on how to make truly useful information readily available to enrollees and their treating physicians. The report is due to be delivered in June at the AMA Annual Meeting.

The consensus at the meeting, and in past statements by the AMA, is that the transparency is crucial in helping patients make informed decisions. Such information likely to be considered includes allowable payment amounts, including patient cost-sharing amounts, for all covered tests, procedures, services, equipment and supplies under the enrollees' insurance contract. That information should be available through a password-protected Web site. The information would break out what insurers would pay physicians.

If patients are to comparison-shop, which is a goal of consumer-directed health care, they need the best and most accurate and complete information available. For physicians, such information is helpful, because if they are going to discuss costs with a patient, they need to know the exact amount to have an informed conversation.

Right now, if patients were to use price information posted by Aetna -- one of the first plans to put such information online -- they would not see exactly what procedures really would cost, because all they would see is the negotiated physician rate. They wouldn't see any additional discounts Aetna might take from the physician. They wouldn't see hospital charges. They wouldn't see what an out-of-network rate might be.

This is not to pick on only Aetna, which has posted its top 20 procedures for members in certain markets. Other insurers could take a similar tack in posting price information. And depending on the contract, a physician might have a gag clause preventing him or her from telling the patient about any deviations in price from what's listed.

All in all, what is being typically posted now gives patients and physicians enough price information but falls short of what's needed to make an informed decision when it comes to cost. As insurers expand the procedures they post, and the markets covered by those posts, the most patient-specific information possible needs to be made available.

Insurers right now are providing a window into the health plan system. But for consumer-directed health care to work, plans instead need to provide a magnifying glass.