One way to highlight the inefficiencies of the U.S. medical system is to compare purchasing a new car with purchasing surgery. When a person shops for a new vehicle, she’ll typically do some online research, then visit the car lot to test drive a specific vehicle. After cost-benefit analysis, even a rudimentary one, and negotiation, the car is purchased. By the time of sale, the purchaser has determined the car is worth, say, $40,000.
Contrast that with buying surgery. First, nobody ever says he’s going to “buy” surgery, because few patients view it as a purchase. Once a specialist recommends surgery, patients often blindly follow the doctor’s suggestions for facility and surgeon. Shopping around rarely happens, and there’s a stigma attached to it — who would hunt for a better deal when her health is at stake?
“The industry operates like no other marketplace in the world. It is completely asinine,” said Shakil Haroon, founder and CEO of Mpirica Health Analytics. “People don’t know what services cost until months after they’ve received (them). People don’t know what the quality of care is beyond just hearsay. It is absurd.”
Haroon’s company is an early player in changing the way consumers pick who operates on them and where they get that operation. Visitors to Mpirica’s website can search for operations in a given area, and the platform spits out a listing of area hospitals, each accompanied by a quality-assessment score between 100 and 800. The scoring system is outcome-based; it will indicate the likelihood of success, not how friendly the nurses are or how tasty the cafeteria food is. Included with the score is the estimated cost of the operation.
This information is free and intended to build consumer awareness. The Mpirica Premium service also lists scores for individual surgeons, and the Enterprise service, designed for self-insured companies, tailors listings based on the company’s health plans. The paid services are in beta through November.
Mpirica’s numbers help shine light on an inefficient and clunky medical industry. The U.S. spends almost 18 percent of its GDP on health care, nearly double the rate of most Western nations, and the average American’s annual health expenditures are about $9,000.
That money is being collected in an extremely uneven fashion. According to Mpirica’s data, gallbladder removal usually costs $53,762 at Swedish Medical Center in Seattle, which received a 620 score from Mpirica. Across Lake Washington, EvergreenHealth Medical Center has a slightly lower score, at 600, but the operation costs $24,689 there.
Traditionally, patients and employers wouldn’t care about Evergreen’s bargain price — if the insurance company covers the cost, the in-network facility usually wins out. But Haroon cites a couple of changes in the medical industry that are causing consumers to turn to services like Mpirica.
First, the entity paying for a good deal of medical care is the federal government. Medicare and Medicaid expenditures were $1.04 trillion in 2013 and are projected to grow by another $922 billion by 2022. Thus, the Centers for Medicare and Medicaid Services is requiring hospitals to show measurable quality or miss out on federal funds. Add to that the growing popularity of high-deductible insurance plans, especially since the implementation of the Affordable Care Act, and consumers are growing more cognizant of the cost of their health care since they have to pay more out of pocket.
Companies are using information like what Mpirica provides to hone the efficiency of the care their patients pay for. Walmart, for example, limits employees’ choices for high-risk surgeries to hospitals with the best outcomes and a track record of foregoing unnecessary treatment. With Mpirica, information of that nature is available to the masses.
Building consumer awareness of hospital quality and prices, the goal of Mpirica’s free service, is one step toward changing the way people shop for procedures. The first prompt in the interface is for the operation, which makes clear Mpirica’s scores aren’t indicative of a hospital’s overall quality.
“It’s not an all-out hospital score because a given hospital does not do a fantastic job at everything,” Haroon said. “Some do really good at heart or (orthopedic) or (gastrointestinal); it sort of follows the skill level of the surgeons.”
What Haroon is finding is that a hospital’s skill at an operation doesn’t translate to higher costs for the procedures. “Consider handling complications,” he said. “If you’re a bottom performer and 43 percent of the time something went wrong, you’re in constant fix-it mode. People stay longer in hospitals while these complications are worked out. Inefficiencies breed cost increases, and those costs have to be passed on.”
Haroon is in negotiations with companies interested in Mpirica’s top-flight services, and the goal is that, equipped with the knowledge of hospital and surgeon performance, far fewer costs will be passed around, and Americans’ health care burden can begin to shrink.
Writer Marjorie Clark contributed reporting to this article.