This week, NPR’s Marketplace aired a piece on what I have taken to calling the “black box of healthcare” – pricing. There is a committee, called the RUC, set up and run by the American Medical Association, that reports to CMS (the federal unit that runs Medicare and Medicaid) on relative value numbers for the thousands of medical procedures that wind up as billing codes in Medicare and your health insurer. Those relative value numbers = PRICES. This isn’t considered price-fixing under anti-trust rules because the RUC reports to CMS, which then publishes the numbers on the Medicare reimbursement rate schedule. So the AMA isn’t publishing the prices, CMS is. Fox, meet henhouse. Or, stated in another way: airplane, meet the black box that is making you crash and burn. The Marketplace page linked in the 1st graf has plenty of linkage to additional context for this issue. Read them, and weep. How is it that an industry whose aggregate cost is now at close to 20% of US GDP gets to set its own prices, and then have them published by the federal government as The Official Price List? It’s called effective lobbying, and it’s so effective that it’s essentially kept access to the pricing committee process a secret for decades. Which makes it pretty clear why so much of our GDP goes to healthcare, doesn’t it? The sound bite in the story that I found the most hilarious was from Charlie Baker, the former CEO of the Harvard Pilgrim health plan in Massachusetts. His quote: By having a process that for all intensive [sic] purposes isn’t a public process, and doesn’t appear to actually be accountable to much of anybody, I think that’s kind of un-American! I find this hilarious because Harvard Pilgrim is a member of America’s…
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