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Medicare To Post Prices It Pays For Medical Procedures, Drive More Pricing Transparency

In another bid to make health-care costs more transparent, the Bush Administration is expected announce plans to publicize the prices the government's health programs pay hospitals and physicians for common medical procedures.

This move, long fought by many within the healthcare community, will help drive the movement toward more transparent pricing. 

In the next few weeks, Medicare will post on its website the amounts it pays to cover certain procedures, said Mark McClellan, the head of the agency that runs the federal program for the elderly and disabled. Then, the government will make more data available in several high-cost metropolitan areas, gleaning information from Medicare and other government programs as well as from private-sector employers and insurers.

The effort is part of a Bush-administration push to inject more free-market principles into health care, in the hope that consumers will help rein in costs if they are armed with better information. The idea is that people will make wiser decisions about which providers to choose, and may even wrangle for lower charges if their own money is on the line.

In addition to price information, quality information also will be available.

"People deserve to know, and they have a right to know about the quality of the care they receive and its cost," said Health and Human Services Secretary Michael Leavitt.

He declined to specify which cities might be the initial focus of the pricing initiative, which will roll out in the coming months. He said the locations would have higher than average health costs and employers and private insurers willing to participate.

The price information will be tied to specific hospitals and physicians, Mr. Leavitt said—a fact that undoubtedly will make many providers nervous. The data will come from claims data held by Medicare and Medicaid, as well as the programs that provide health care to federal employees and the military.

Hospitals have raised concerns that charges have little use to most people. Patients with insurance, for example, pay rates negotiated by insurance companies. Plus, the costs encompass more than just a procedure. Dr. McClellan said the government is working on providing prices of associated care, such as rehabilitation, in addition to procedures.



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