Friday, August 19, 2005
Aetna responds to consumer-driven market pressure
[Vanessa Fuhrmans, "Insurer Reveals What Doctors Really Charge," The Wall Street Journal, 18 August 2005.]
Lack of information is often held up as a reason why consumers cannot act rationally in the health care marketplace. As The Wall Street Journal reports, however, insurers are moving to address this issue:
Starting tomorrow, Aetna Inc. plans to make available online the exact prices it has negotiated with Cincinnati-area doctors for hundreds of medical procedures and tests. The initiative, which Aetna hopes to take eventually to other parts of the country, aims to give patients the tools to comparison shop and make savvier decisions with their health-care dollars.
Aetna is the first major health insurer to publicly disclose the fees it negotiates with physicians. Some in the health-care industry say the move is likely to push more insurers to follow suit, which in turn would give a significant boost to consumer-driven health plans.
"To create a more functional health-care market, we needed more transparency," says Ron Williams, Aetna's president.
As fee information becomes more readily available, it is likely to put more pressure on doctors to compete on price, says Regina Herzlinger, professor of business administration at the Harvard Business School and a leading consumer-directed health-care advocate. That, in turn, may prod physicians to publish or share data on the quality of the care they provide, she says, even though some have resisted attempts at doctor quality ratings until now. "If I were a doctor, I would want to demonstrate all the things I offer besides price," says Prof. Herzlinger.
Competition may be one reason Aetna is moving aggressively. As consumer-driven plans rise in popularity, health insurers will compete less on premiums and more on the financial and information services consumers will need to use them effectively.
[Devon Herrick, "Health Insurance Is Better To Own Than Rent," The Dodge City Globe, 23 March 2005.
John McClaughry, "Patient Power: A Health Care Reform Agenda for Kansas," The Flint Hills Center, May 2004.]
[Vanessa Fuhrmans, "Insurer Reveals What Doctors Really Charge," The Wall Street Journal, 18 August 2005.]
Lack of information is often held up as a reason why consumers cannot act rationally in the health care marketplace. As The Wall Street Journal reports, however, insurers are moving to address this issue:
Starting tomorrow, Aetna Inc. plans to make available online the exact prices it has negotiated with Cincinnati-area doctors for hundreds of medical procedures and tests. The initiative, which Aetna hopes to take eventually to other parts of the country, aims to give patients the tools to comparison shop and make savvier decisions with their health-care dollars.
Aetna is the first major health insurer to publicly disclose the fees it negotiates with physicians. Some in the health-care industry say the move is likely to push more insurers to follow suit, which in turn would give a significant boost to consumer-driven health plans.
"To create a more functional health-care market, we needed more transparency," says Ron Williams, Aetna's president.
As fee information becomes more readily available, it is likely to put more pressure on doctors to compete on price, says Regina Herzlinger, professor of business administration at the Harvard Business School and a leading consumer-directed health-care advocate. That, in turn, may prod physicians to publish or share data on the quality of the care they provide, she says, even though some have resisted attempts at doctor quality ratings until now. "If I were a doctor, I would want to demonstrate all the things I offer besides price," says Prof. Herzlinger.
Competition may be one reason Aetna is moving aggressively. As consumer-driven plans rise in popularity, health insurers will compete less on premiums and more on the financial and information services consumers will need to use them effectively.
[Devon Herrick, "Health Insurance Is Better To Own Than Rent," The Dodge City Globe, 23 March 2005.
John McClaughry, "Patient Power: A Health Care Reform Agenda for Kansas," The Flint Hills Center, May 2004.]
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