Say what you will about Steven Brill’s Time magazine cover story, Bitter Pill, but it’s hard to deny that it — and his media tour that’s followed — has magnified the discussion about the cost structure and the power plays that happen within the healthcare industry.
An example of that came Wednesday when a Center for American Progress event put Brill on stage with two other opinionated personalities: Dr. Giovanni Colella, the CEO of healthcare transparency company Castlight Health, and Dr. Ezekiel Emanuel, senior fellow at the Center for American Progress and vice provost at the University of Pennsylvania.
The most colorful and thought-provoking discussion sparked when they were asked about solutions for bringing down the cost of care.
Colella, naturally, emphasized the role of price transparency and consumer education in lower healthcare costs. He likened the current approach to consumers paying for a Ferrari but getting a Toyota instead, and implied that a big part of the problem is that consumers don’t actually know what they’re buying when they receive care.
So one approach is giving consumers more transparency and letting competition among payers and providers drive down prices. “I don’t believe in a nationalized healthcare system. From a social standpoint, I like the idea, but from an economic standing, every time we’ve tried to regulate prices, it hasn’t worked,” Colella said. “If you don’t allow a market to set prices, I’m not convinced it’s going to work.” Rather, educating consumers and aligning financial incentives would drive behavior change.
A problem with that, Brill retorted, is that the nature of receiving healthcare often doesn’t allow the time or means for “shopping around.” A patient with chest pain, for example, isn’t going to compare prices on an emergency department visit before going. “There isn’t a fair market today where the individual buyer has any power in the marketplace.”
Emanuel fought back on the consumer-centric approach too, and asserted that the responsibility for driving costs should be more on doctors and insurers. “We need to shift from educating the public […] because doctors and hospitals are where the real change is going to take place.”
Plus, he said, “everything we know about consumers is that educating them gets very little needle movement.”
Instead, he summed up an approach supported by the Center for American Progress, in which payers and providers would negotiate universal payment rates within a state. That brought up the impending shift toward a pay-for-performance reimbursement structure, which Brill doesn’t seem to be a big fan of. “To the people providing the service, how much time you spend doing something actually matters to your cost structure,” Brill said. “I wonder if you really want to go into that kind of insurance business,” which seems to be difficult to implement and make practical.
Although the conversation didn’t come to a real conclusion, it brought up some important points in each of these approaches. I recommend checking out at least the middle part of the discussion here. I’m also eager to hear thoughts on this. Of course, bringing down costs is going to require effort from all parties, but who’s really in the driver’s seat?