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Website working, time to shift health care debate to costs

From the time it was passed four years ago, the health care reform law has been controversial. In the final months of last year, the news focused on the disastrous rollout of the federal insurance exchange website, healthcare.gov. More recently, the website appears to be stabilized, but there are questions about the so-called back-end functions such as relaying enrollees’ information to insurance companies and income verification for the purposes of determining federal subsidies for lower-income applicants.

But those are mostly technical issues and will be resolved eventually. A bigger problem with ObamaCare is the apparent failure to address health care costs, despite the law officially being known as the Affordable Care Act.

Health insurance and thus health care coverage has been expanded by the law, which is a good thing despite 30 million Americans still without health insurance. But little has been done to address the fact that the United States spends about twice as much on health care, on a per-person basis, as any other advanced country. Why are no politicians talking about this?

Health care in the United States can hardly be called affordable.

Not only are prices for common medical procedures and many life-saving drugs much higher in the United States than in other countries, but costs vary widely in different parts of the country and in different cities.

A story reported by a Pittsburgh newspaper last weekend highlights the problem, and also suggests health care in Western Pennsylvania is more costly than it should be. The widow of a Butler County man who died of pancreatic cancer was able to see stark examples of health care pricing madness because her husband had received identical treatments at UPMC facilities here as well as at the highly respected Johns Hopkins Hospital in Baltimore. Reviewing her explanation of benefits from Highmark, the dominant health insurance in Western Pennsylvania, the woman was able to compare identical treatments her husband received in early 2013. His outpatient chemotherapy treatment at Johns Hopkins generated a bill of $2,545, with health insurer Highmark paying $2,493. The same procedure at UPMC Passavant produced a bill of $13,789, of which Highmark covered $7,704.

Her Highmark benefits report revealed that UPMC charged four times as much for a standard chemotherapy drug as Johns Hopkins. For another drug, UPMC was paid seven times as much as Johns Hopkins. Why? The quality of care was not different.

A national survey of prices for standard medical procedures from across the country was released by the U.S. Centers for Medicare and Medicaid Services last summer. It found prices in some cities and some parts of the country differed by tens of thousands of dollars for the same routine operation, such as gall bladder removal or implanting a pacemaker.

There is no rational explanation for the costs charged by most hospitals. When the director of the Johns Hopkins School of Public Health was asked about the pricing difference between Johns Hopkins and UPMC and why the Pittsburgh hospital charged so much more, his answer was simple: “Because they can.”

In many parts of the country, including Western Pennsylvania, there is a dominant health care provider, meaning little or no price competition.

One possible contributor to health care price inflation is that most patients never see the costs. And if they do see the charges, they generally don’t care because their insurance company pays the bill. While this is good for the patient, the idea that it doesn’t matter because “someone else is paying for it” is wrong. These high costs are being paid for by everyone — by every employer who provides health insurance for its employees for every individual who buys heath insurance on their own.

It’s time for the ObamaCare debate to shift to what the law’s name implies it was intended to address — costs, and making health care affordable. Congress and the president should be talking about what can be done to rationalize and reduce health care costs in the United States.

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