A Call for Transparency in Healthcare Cost and Quality

At the Consumer Directed Health Care Congress in San Francisco last week, a panelist challenged the audience with a question. "How much", he asked, "does it cost to change a battery in a pacemaker?" Conference attendees gasped when he revealed the answer. The cost to change the battery in his 85 year old mother's pacemaker: $35,000.

As employers shift their benefits programs to Healthcare Savings Accounts and employees take on greater personal responsibility (higher deductibles and co-pays) for their healthcare spending, they'll need a lot more information than they typically get today from doctors and hospitals.

One of the things I like about the retail movement in healthcare is the focus of companies like MinuteClinic, RediClinic and others on convenience, customer service, high-tech operations, and transparent pricing. These clinics, typically located in retail pharmacies or big-box discount stores and staffed by nurse practitioners, provide one-stop shopping for a range of primary care services. Visit their web site or one of their clinics, and you'll know exactly how much you will pay for any given service. If, as some experts predict, there will be thousands of these facilities across the nation within the next few years, it could turn traditional primary care on its head. At the very least, traditional physician clinics will be forced to match service expectations and be much more transparent in their pricing.

But what about other healthcare services? In a previous Blog I wrote about hospitals like Norton Healthcare that are posting quality information on their web site for the entire world to see. Want to know how good they are at doing a coronary by-pass procedure? They'll tell you. I expect that trend to grow.

Microsoft, through its secure employee health portal, recently launched a service that lets users compare hospitals in any region by zip code for mortality rates, complications, length of stay, cost, experience, and other factors associated with dozens of common procedures and diagnoses. Even as a physician I was a bit surprised to see that the cost for a total hip replacement in the greater Seattle area varied between $13,996 at one local hospital and $46,758 at another. Furthermore, there wasn't necessarily any correlation between the cost of the procedure and the hospital's quality or experience doing it.

As this kind of information becomes even more transparent, and as consumers (patients) are placed in a position to fund more and more of their healthcare expenditures directly out of pocket, I believe they'll start voting with their feet. Why would anyone pay a higher price for lower quality and potentially more complications, especially when it concerns your health? And you better believe if I ever face a $35,000 fee for changing a battery, I'm going to shop around.

What do you think? Let us know.

Bill Crounse, MD Healthcare Industry Director     Microsoft Healthcare and Life Sciences