Anyone who’s ever had a visit to the emergency and then received the bill for it understands that healthcare is anything but cheap. The costs associated with healthcare are enormous, and thus the costs associated with providing employees with health insurance are also enormous. Although this is not a particularly new problem, a new system has been implemented for some workers in California which aims to correct it.
A New Healthcare Payment Model
Because of the free-for-all way in which our healthcare system operates, the same medical procedure performed at two different hospitals may vary widely in cost. The same operation may cost almost ten times as much if performed at one institution as it might when performed at another. Often, people with health insurance aim to have an operation performed at the more expensive hospital, assuming that it is covered by their insurance.
Under the new model available to public employees in California, health insurance will cover the cost of medical procedures within a specific price bandwidth. If the price of a particular operation falls outside of the range that has been estimated to be appropriate, the employee must pay the difference between the maximum amount of money covered by their insurance and the actual bill from the hospital.
It remains to be seen whether this model will work well for public employees in California. But it does raise some interesting questions about the variance in pricing for healthcare in the US. Is it really worth it to see the doctor who charges two or three times as much?