The elements of a perfect storm are massing around the issue of cost equity. Health care providers need to take seriously the public’s perception that the deck is stacked against them and that they are unwitting participants in a national shell game. Three examples illustrate why a groundswell of skepticism may erode support for meaningful health care reform initiatives.

1. Researchers at Dartmouth have meticulously documented wide variation in health care quality, let alone price, from one locale to another for specific procedures. To date, public reaction to such variability has been relatively muted because this is largely seen as inside baseball and not well understood by consumers. Within the health care industry, however, policy makers and payers have taken notice and realize that “bending the cost curve” will not occur until this issue is addressed head on — and fixed.

2. More recently, Steve Brill’s searing expose of health care costs (“The Bitter Pill” in Time (requires subscription), exposed a raw nerve in the ongoing debate about health care reform. The most obvious villain cited by Brill was the infamous chargemaster used by hospitals to aggregate unit costs. It immediately became the poster child of what is wrong with our health care system. The public saw this as an egregious example of hospitals “piling on.” While there are sound operational reasons for using a master billing mechanism, the public outcry was rooted in widespread anger and dismay over a system that the average person — or purchaser — perceives as out of whack and far beyond the ability of individual patients to influence. Read more »