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Those Confusing EOBs…Once Again!
Trudy Lieberman | February 27, 2013
Let’s face it. Despite all the rhetoric about health care transparency, most health care providers really don’t want patients to know the price of their products and services. Stephen Brill made that point brilliantly in his 36-pager, Bitter Pill: Why Medical Bills Are Killing Us, in Time this week. This was again apparent to me when someone asked me to help decipher his Explanation of Benefits (EOB) statement from EmblemHealth’s Medicare prescription drug plan. “The information about the costs is completely opaque,” he said.
My friend’s EOB summarized payments for four drugs—two insulin products, a statin and a blood pressure medication—all common medicines millions of Americans take. The EOB also identified various payers for drugs—although not very clearly. What was missing was the price of the medications themselves. He wanted to know if they were high, low or middling. Was he paying too much? Was the plan paying too little? He had no clue.
Price aside, the insurer did try to break down its explanations into digestible chunks, but they confused more than they clarified. One page out of eight gave three columns for listing who paid what for the patient’s drugs. One for what the plan paid, another for what the patient paid, and the third for “Other Payments”.
Here’s where it got confusing. The EmblemHealth plan paid $197.02 for Novolog Flexpen Syringes. The patient paid $147.77. The “Other Payments” column showed that Medicare’s coverage gap discount program paid $147.77. Did both the patient and Medicare pay $147.77? For more information, it directed patients to Section 3, which described “out-of-pocket costs.”
Out-of-pocket costs include not only payments that patients (and their friends and families) make but also any payments made from Medicare’s Coverage Gap Discount Program, more commonly known as the donut hole. The “Other Payments” column seemed to indicate that $147.44 was paid by donut hole coverage. Adding to the confusion, that column didn’t mention the term “out-of-pocket costs.”
The patient was confused. Was EmblemHealth making duplicate payments? Or were the patient and the donut hole coverage just splitting the remaining costs? It was impossible to tell because the total charge was not identified. “I don’t know whether this is a double payment because I don’t know the price of the drug,” he complained.
Patients need prices, which are usually deep dark secrets. Did EmblemHealth or Express Scripts, which apparently manages the drug benefit, make a deal with drug manufacturers to sell these medicines at some discounted price? If there was a discount, was it passed on to patients or were they charged full price? There’s no way to tell from the EOB.
Not revealing prices may be a good business strategy, but it does not compute with the prevailing ideology that consumers should—and can—shop for health care the same way they do for toothpaste and toasters.
Without price information, the transparency movement hits a dead end.
More Blog Posts by Trudy Lieberman
Trudy Lieberman, a journalist for more than 40 years, is an adjunct associate professor of public health at Hunter College in New York City. She had a long career at Consumer Reports specializing in insurance, health care, health care financing and long-term care. She is a longtime contributor to the Columbia Journalism Review and blogs for its website, CJR.org, about media coverage of health care, Social Security and retirement. As a William Ziff Fellow at the Center for Advancing Health, she contributes regularly to the Prepared Patient Blog. Follow her on twitter @Trudy_Lieberman.
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|jim jaffe says|
February 27, 2013 at 8:50 PM
not revealing prices is a great strategy for sellers, which is why they labor so hard to protect it. anytime the seller knows the price and the buyer doesn't, the buyer is going to get hosed. sellers in other areas would behave similarly if they could, but consumers won't permit it. the government has managed to somewhat clarify mortgage and credit card statements, but medical providers have been more successful in protecting their turf. were I in their shoes, I'd take the same posture. why consumers put up with it is a more provocative question. generally they appear not to care
|Trudy Lieberman says|
March 2, 2013 at 3:50 PM
Jaffe raises a great point. Why don't consumers demand more price information? Is it because they think shopping is hopeless anyway? Other thoughts? The test will come when the exchanges start rolling. Will consumers think it's okay to get a definition of a deductible, but no premium information?
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