May 10, 2006
Mr. Ray Adams
President of Laughlin Memorial Hospital
119 South Main Street
Greeneville, TN 37743
Dear Mr. Adams:
As you are probably aware, the number of direct paying patients in our community has been increasing, primarily due to the TennCare disenrollment and people choosing higher deductibles to reduce the cost of their insurance premiums.
In order for these citizens to make more informed decisions about their care, it is essential that hospitals make the pricing of their routine, outpatient services available to physicians and their patients so that together we can plan cost effective diagnostic strategies and treatment regimens.
If you have seen PATMOS EmergiClinic’s billboards or brochures, you know that we publicly post pricing information that is easily comprehensible to patients. We have done this to encourage the uninsured and other direct payers of primary medical care to avail themselves of our services. The clinic now has accumulated nearly 7000 patient charts, with 60% of those being uninsured. I believe that if we can’t solve the problem of the uninsured at the local level, a single payer national health plan will probably be imposed on all of us from the federal level. That would not be in the best interest of Laughlin or our community.
By the end of the decade, I predict that healthcare will be either single payer or consumer driven. With the new political emphasis on transparent pricing, it is possible that we will see an explosion of the latter. Many Americans are already realizing that they don’t need, can’t afford, and can’t trust third parties to pay for routine medical care. They are increasingly coming to low-cost, insurance-free clinics like ours that post their prices up-front. I would imagine that Laughlin would like to position itself at the front of this movement.
You should know that Takoma Hospital has assisted direct payers for the last five years by issuing discounts through our clinic. At the time the agreement was made with TAH, I approached Chuck Whitfield to discuss a similar arrangement with LMH. Instead of meeting with me directly, he referred me to Wayne Huff, who told me he did not have the authority to make such a decision. We were both left perplexed as to why Mr. Whitfield did not handle the matter himself. Given the current movement in this country toward hospital pricing transparency, I thought I should now appeal directly to the LMH board.
I am not asking for Laughlin to offer discounts to PATMOS where patients would pay us and LMH would bill us later. I would much prefer that patients settle accounts directly with Laughlin – it would be simpler and less costly for everyone. Takoma switched to this arrangement last month, and it is working well for both of us.
All I am asking is that LMH provide prices of its outpatient medical services. To assist you with this, I have provided a list of some outpatient tests and procedures that our patients need on a fairly regular basis. You might consider simply using your Medicare charges for these patients. I have already discussed pricing for radiological services with Dr. Marino, and he is more than willing to assist in this effort. Please let me know if you plan to provide prices for these tests and the date by which you plan to make them available.
You probably are aware that the federal government has initiated action to require greater accountability from non-profit hospitals and might soon require all hospitals to make their prices transparent. Since the spring of 2005, the Senate Finance Committee under the leadership of Senator Chuck Grassley (R-IA) has launched multiple inquiries to determine if non-profit hospitals are living up to their tax exempt status. The “Hospital Price Reporting and Disclosure Act” was introduced in the House of Representatives (H.R.3139) last June and then in the Senate (S. 1827) in October.
On several occasions within the last several weeks, President Bush and his administration have promoted hospital price transparency. Michael Leavitt, Secretary of Health & Human Services, has said, “People deserve to know, they have a right to know the quality of care they receive and its costs.” Al Hubbard, the President’s National Economic Council director, recently stated that it is “un-American to not make price and quality information available if the customer wants access to it.”
At its annual meeting two weeks ago, the American Hospital Association responded to this new political emphasis by adopting as its goal “to share meaningful information with consumers about the price of their hospital care.” Just last week, HCA chairman Jack Bovender announced that telling patients how much they will pay in advance at its hospitals will be “a top priority.”
I am confident that Laughlin’s board of directors will seize the opportunity to be a leader of the new consumer driven movement while doing right by both the citizens of our community as well as its own tax exempt status. I am confident that it will make available to all of us in the near future the prices for LMH’s outpatient services (such as those listed in this letter’s attachment) and eventually for most if not all services Laughlin provides. If there is any way I can assist you in this important effort, please let me know.
Sincerely,
Robert S. Berry, MD
Dr. Berry Requests Pricing Transparency
