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May 16, 2019

Making General Groves Proud

With apologies to Nobel Prize winner Richard Feynman, most physicists are not known for their writing skills.  After all, these are the kids who picked time in a lab over reading Shakespeare.  Though Feynman’s personal website has a section alongside his textbooks and scientific publications for his ‘popular works,’ he holds no candle to fellow physicist Henry DeWolf Smyth when it comes to writing for the general public.

Smyth’s one big hit was released August 12, 1945 and people gobbled it up.  ‘Atomic Energy for Military Purposes’ just sounds like a ‘can’t put it down’ page-turner, doesn’t it?  Well, the US had just dropped two nuclear bombs on Hiroshima and Nagasaki the week before.  Smyth’s report was the official story of the incredibly secret Manhattan Project.

One of the amazing things about the project was the government’s ability to keep such a massive venture from becoming exposed.  That was mostly due to the relentless, paranoid secrecy of Smyth’s boss, General Leslie R. Groves, the man in charge of all Army activities related to the Manhattan Project.   A lack of cell phones and no TMZ website helped, but Groves took intelligence secrecy to new heights to keep the existence of Manhattan, much less the full scope of its work, from virtually any outside knowledge.

Hospitals and payers must have studied his tactics.  For sure, they must have his famous sign from the Los Alamos lab (What you see here, what you do here, what you hear here – when you leave here, let it stay here.) hanging in their offices.

You see, the prices negotiated between payers and hospitals have forever been as closely guarded secrets as Robert Oppenheimer’s lab in the desert north of Santa Fe.  If we had been able to keep patient health data as closeted as they have been able to keep the prices actually paid to hospitals, we’d never have needed HIPAA.

But, the Trumpsters are proposing to blow that wide open. 

As of this past January, hospitals have been required to post their retail pricing.  People know that is a waste of time because almost no one pays what is on the charge master. 

That appears to have been just a distracting opening bit to soften them up, a favorite negotiating tactic of the President.  In March, the Department of Health and Human Services published a proposed rule requiring an additional disclosure, the one that matters – the price actually paid by commercial payers, the negotiated contract rates.

Public comments were due last week, though an extension has been requested.  Of course, the incumbent stakeholders – hospitals and payers – are forecasting calamity of Biblical proportions if such proprietary trade secrets were made public. Prepare for a locust swarm, they warn.

But as we are seeing, price transparency is a consistent lever the President and his team are bringing up against healthcare costs (hello, pharma industry).   If this sticks, and I would not bet against it, physicians are likely not far behind.  Might be worth thinking about.

Tim Coan
Tim Coan

CEO and founder

Tim Coan, ALN’s CEO, writes an insightful and witty blog weekly about a variety of topics relevant to independent physician practices.