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Reality Check w/ John Tracy: It’s time for transparency on health care costs

By John Tracy 5:07 PM March 2, 2017

I used to work as a salesman for a big name music store in Seattle. It’s the kind of job you take between gigs as a semi-working musician.

If you came in to buy a guitar or a drum set from me, we were instructed not to give you the sticker price, but rather, find out how much you were willing to spend.

It was a music store run as a used car lot, and I thought it was sleazy even then.

My practice was to give customers the retail price, and if I could offer a discount I would tell them up front.

I sold a lot of guitars, and both the store and customer benefitted.

The health care industry, especially in Alaska, is run like that old music store.

Which is why I was surprised and happy to see the Anchorage Assembly pass a new law Tuesday night, requiring medical providers to give patients a non-binding estimate for medical procedures upon request.

The law even requires that billing codes be included, so consumers can call their insurance company to find out, up front, what insurance will likely cover.

Former assemblyman and Alaska Dispatch columnist Charles Wohlforth has done a lot of heavy lifting on trying to determine why health care costs in Alaska are so out of whack.

You would be well served to read his series of columns.

When a standard knee replacement that costs just over $2,000 in Seattle costs more than $10,000 in Anchorage, according to Premera Blue Cross, it explains why an increasing number of Alaskans are having medical procedures and dental care done outside.

Some of the cost drivers make sense.

Our health care market is small and there are few competing specialists.

And like every other industry, the costs of doing business here are higher because of our isolation.

But that doesn’t quite explain why orthopedic and coronary procedures cost up to ten times more than Outside. We’ve all heard horror stories from friends and family who did not discover this until they received their bills.

If you’re insured, your insurance company will drive a deep discount from your medical provider.

They, in turn, inflate their costs, knowing that insurance will pay a fraction of the bill.

And over time, the true cost of a procedure is simply fiction.

Some health care providers urged the assembly to hold off on the medical transparency law, in the event state lawmakers pass something similar. I’m glad they didn’t wait.

Regardless, this kind of transparency may be part of the next national health care bill out of Congress.

If you deserve to know up front the retail cost of a guitars, you deserve to know how much it will cost to have a knee replaced — even if you have to accept that both will come with some kind of strings attached.

John’s opinions are his own, and not necessarily those of Denali Media or its employees. 

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