New Data Exposes Scammy Hospital Pricing; Now Let's Crowdsource Some More

from the it's-a-step dept

A few months ago, we wrote about Steven Brill's amazing article in Time Magazine about hospital billing. As we noted at the time, the story confirmed what many people believed: that healthcare is a giant economic scam, and it's often the hospitals (not necessarily the insurance companies) who are driving the massive increases in costs. A big part of the scam is the fact that hospitals don't reveal their price list -- known as the "chargemaster." It's all a giant secret. There's no such thing as comparison shopping. There's simply no data anywhere.

Well, that may be changing. The US government just released data on what various hospitals charge for various things, along with how much Medicare actually pays in return. This has quickly resulted in people noticing massive differences in pricing for the same treatment in different hospitals (including, at times, hospitals very close to one another). This release definitely provides some significant data about just how massively hospitals are overcharging for things, even if most patients never pay the listed fees.

Still, it's not quite enough. Brill has responded to the release by noting that while this is a big deal and can be quite helpful in highlighting how broken the system really is (and hopefully will lead to a lot more reporting on the subject), it could go much further:

The feds need to publish chargemaster and Medicare pricing for the most frequent outpatient procedures and diagnostic tests at clinics—two huge profit venues in the medical world. But an even bigger step toward transparency would be collecting data that Medicare doesn’t have: exactly what insurance companies pay to the various hospitals, testing clinics and other providers for various treatments and services.

After all, as the hospitals themselves concede in downplaying their chargemasters, these insurance prices are the ones that affect most patients.

And that is one price list where there is close to zero transparency.

While hospitals and insurance providers clearly will not want to give up that information, Bill points out that patients do find out this information, so perhaps we should crowdsource the data:

So even if insurance companies don't want to participate, Brill writes, states could crowdsource price information from patients:

...state pricing centers could gather the information from patients who volunteer, in exchange for a promise that their names won't be used, to submit their Explanations of Benefits. After all, a hospital or insurance company can't claim a patient can be prohibited from talking about or making public his or her own bill.

For a market to work in any effective manner, pricing information must be clear. It's not that way at all in healthcare, and it needs to get that way fast if we're ever to get healthcare pricing under control.

Filed Under: chargemaster, crowdsourcing, data, healthcare, healthcare costs, hospital pricing, medicare, steven brill

In Which I Debate A Media Mogul Who Insists It's Crazy To Give Content Away For Free

from the more-opportunity-for-me dept

Last week, I went on PBS Mediashift's podcast to debate media mogul Steven Brill about the power of paywalls. Brill runs Press+, one of the first companies that built a business around setting up paywalls for publications. They focus on NYT/FT-like "metered" paywalls, where you get some content for free, but if you hit a certain number of pages, you're locked out unless you pay. Brill, whose company had to sell out to a much larger player recently (suggesting it's not as successful as he makes it out to be), insists during the episode that there is no way to make money giving away journalism content for free, and insists that advertising is no way to make money. You can hear our debate starting at around 18:45 on the podcast:
There was a lot more that could have been said if we'd had the time, but I found a number of his arguments bizarre. The internet represents a huge opportunity to grow and expand a business -- yet he's celebrating the fact that the sites who agree to put up the giant padlock he's selling are "only" losing a little bit of their traffic? This is the time to be investing in and growing traffic, because as soon as free competitors come along, and people realize they don't need to pay any more, what will these sites have left? They'll have less traffic, less advertising and less subscription revenue. That's no way to invest in the future.

Separately, there was a nonsensical story about a journalism student who might get hired for a publication, but if that publication gives away its content for free, she can't pay her rent any more. I have no time for arguments like that. If she got hired, she has a salary. If a publication is giving away content for free that doesn't mean it makes no money or has no business model. Arguments like that suggest someone who has no real argument.

I am sure that the publications -- mostly regional newspapers -- that are using Press + are successful in slowing the rate of churn. Some paper subscribers probably agree to do a bundled package for the time being, getting paper and digital access. But it's not a long term solution. Perhaps for people of Brill's generation, it makes sense, but I don't know many people under 40 who subscribe to a local newspaper any more. There's more and more info available for free online. And there are growing opportunities to provide more such info.

Advertising is a tough way to make a living, but no one says it's the only way to make money online. There are lots of creative ways to make money online that don't involve pissing off your userbase and limiting what they can do. When you do that, you make the content that much less valuable, and that's no way to run a business.

Filed Under: journalism, mediashift, paywall, pbs, steven brill
Companies: financial times, new york times, press+