2007 will be the year of information.
Your price list will no longer be a private matter. Insurers are starting to publish the charges and negotiated rates paid to hospitals, physicians and other providers, and are pairing this data with quality and performance measures. To sum up: there will be continued downward pressure on physician fees in the coming years. While you will be able to eek out some efficiencies in your operations, you may be at or soon will be reaching your peak earnings.
The Sunday Miami Herald article highlighted the range of fees for some services, such as coronary bypass procedures and MRIs. In our capitalist system, the seller should be able to set any price they want and it is up to the buyer to decide whether the price asked is what they are willing to pay. But healthcare is different for many reasons. First, we are talking about people’s health and well-being, so there is a social good component to physician practices. Sadly, this underpinning has been lost over the past two decades as the “free market is G-d” philosophy took hold and left a swath of economic and human debis in its wake. (That’s another discussion.) Secondly, and most importantly, information is not balanced between sellers and buyers. Buyers cannot compare prices, nor can they compare value. Because of the size of the average service and the total cost to the economy, this imbalance creates a situation which is not truly a free market, but akin to an oligopoly in the way that pricing is determined.
What we have been seing over the past 20 years is pushback from buyers – insurers, employers and patients, The federal and state governments