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Outpatient Procedures and the Cost of American Healthcare

, Outpatient Procedures and the Cost of American Healthcare

In recent years, the astounding costs of US healthcare delivery have spurred significant healthcare reform. The Affordable Care Act of 2010 (also known as Obamacare or the ACA) gained international attention by mandating that small business owners with 50 or more full-time employees must provide health insurance coverage for their full-time staff. Companies may opt out of the mandatory coverage, but as of January 1st, 2014 they will pay a substantial financial penalty for each full-time employee left uninsured.

While the Affordable Care Act has succeeded in providing more Americans with health insurance, it remains to be seen whether it can effectively reduce long-term healthcare costs. In the United States, for example, we perform many outpatient procedures (also known as ambulatory care, or care that does not require a hospital stay) at some hospitals that are considered in-patient procedures (requiring a hospital stay) at other hospitals. This means that prices for these healthcare services can vary widely based on where they are performed. This practice also prioritizes healthcare providers, pharmaceutical drug companies, and medical technology manufacturers over patients when negotiating for prices.

Medicare (socialized health insurance available to all US citizens over the age of 65) is able to negotiate more effectively with healthcare providers due to the leverage it has over products and healthcare services. Under the Affordable Care Act, Medicare releases what is known as the Medicare Provider Charge Data for both inpatient and outpatient procedures. These lists compare municipal charges for 100 of the most common inpatient procedures and 30 common inpatient procedures across the country. This allows consumers to get an idea of what certain Medicare-compensated healthcare services cost in their area, as well as provides them with the information they need to make an informed decision when considering local healthcare providers.

 The transparency gives Medicare leverage over egregiously expensive healthcare providers by prompting them to lower their prices to remain in line with the local medical price climate. The problem for consumers facing private outpatient care facilities (that is, outpatient care facilities not affiliated with Medicare) is that transparency of information is no longer present. Consumers have no way of gauging how appropriately (or inappropriately) a given healthcare provider’s services are priced. Not having access to this information means that private healthcare providers can charge whatever customers are willing to pay (often a staggering amount, given that a person’s quality of life is dependent on certain medications and medical procedures). In terms of long-term change to the US healthcare delivery system, providing more transparency within the private healthcare provider and health insurance industries may be the next direction for amendments to the Affordable Care Act.

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