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    THV EXTRA: The confusing cost of healthcare

    6:35 PM, Apr 25, 2013   |    comments
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    BIGELOW, Ark. (KTHV) - For the last three years, there's been much talk about health care. Who pays for it, who should pay for it, and who shouldn't. But, perhaps a bigger issue at hand is not who pays for health expenses, but rather how much Americans pay.

    This topic brings us to Excy Johnson, owner of Wingspur Ranch near Bigelow, a refuge for wild horses rescued off public lands.

    But it was his family's ranch in New Mexico that is a starting place for this story. The family sold it in 2009, and put the money in the bank in the form of CDs. All of the money was set aside for medical expenses; in essence, the family created its own health care savings account.

    That money came in handy a year later when Johnson needed heart surgery, involving an aortic valve and root. While he didn't have health insurance, money wasn't a problem for the rancher, as he had plenty of it ready. He also had the gift of time, as his procedure was not an emergency.

    "I had time to figure out what to do, when to do it, where to do it," Johnson said.

    Through research, he realized Arkansas doctors could perform the procedure. But there was a problem.

    "While I felt comfortable with the competence of everybody here, I couldn't get a price," Johnson explained.

    No local hospital was able to give him a definitive answer as to how much he would need to take out of the bank to pay for the surgery.

    "The hospital gives you a bill. The doctor gives you a bill. The anesthesiologist gives you a bill. The lab gives you a bill," he said. "Trying to integrate all that to try and give me a number was something they just don't do."

    Johnson looked at other hospitals out of state, and got the same result. He even looked at going to India, but that wasn't practical.

    Then he heard from a surgeon friend at Stanford about Cleveland Clinic, so he called the business office.

    "(She) wanted to know how we were going to pay and I told her," Johnson said. "Within a minute she gave me the price."

    Because of that efficiency, Cleveland was the answer. Johnson got the operation for the agreed to price.

    So why travel 900 miles for a medical procedure that could be taken care of in state? Johnson credits the business model. Everyone involved in the surgery - doctors, anesthesiologists, lab technicians - works for the Cleveland Clinic.

    This experience opened Johnson's eyes to how healthcare functions in America.

    "They've done an amazing job of integrating people's healthcare," he said. "There is no reason in the world why they can't integrate the money side of it too."

    We told the story to Paul Cunningham at the Arkansas Hospital Association

    "It's difficult for most hospitals to give an absolute price on any given procedure they perform," Cunningham explained."Because there are so many variables."

    In a rare, 35-page Time Magazine article, billing inconsistencies were found to be one of many contributing factors to a report that shows Americans pay more than $750 billion in health expenses than other developed countries.

    "It's all in the numbers when hospitals set their prices," he said.

    Cunningham told THV 11 that on 70 percent of patients, hospitals get less than the cost of care. Arkansas hospitals on aggregate make less than one percent on patient services.

    Still, Arkansas hospitals account for $10 billion of the state's economy, and employ approximately 40,000 Arkansans.

    While Cunningham admits there is profit in hospitals, he said it's a profit with a purpose.

    "We look at profit as the cost of doing business tomorrow," he said.

    As part of planning for business tomorrow, Arkansas is working to streamline the medical costs. In 2011, Blue Cross and QualChoice, two of the state's largest insurers, joined with the Department of Human Services for the 'Arkansas Healthcare Payment Improvement Initiative.'

    "These questions are getting asked more and more and more and more people are getting answers because of transparency," said Former Congressman Vic Snyder, now with Blue Cross and Blue Shield.

    AHPII's website explains the program by saying that patient information will be entered into a state portal. Healthcare providers will be able to access reports in the portal and create an average cost for the care they have received. If providers provide medical services for the average cost, there will be no action taken. If they provide services for more than the average cost, they will pay part of the 'excess' cost. If they provide the services for less than the average cost, they will benefit financially.

    In 2012, Arkansas was one of seven states chosen to participate in the government's Comprehensive Primary Care Initiative. Its purpose is to encourage collaboration between public and private health care payers to strengthen primary care. Medicare will work with commercial and State health insurance plans and offer bonus payments to primary care doctors who better coordinate care for their patients.

    States across the country are looking at how Arkansas is implementing these healthcare programs and may follow suit.


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