You are a consumer, and as a consumer, you want to make smart money decisions. From catching the latest sale at your favorite department store to clipping grocery coupons from the newspaper to shopping around for your next vehicle, you make sure you aren’t overpaying for life’s necessary items. And good for you for being conscious and doing your research! But when it comes to paying for healthcare, don’t you think this same concept should apply? We agree, it only seems fair.
The way the healthcare system works now (and has been working for years and years), consumerism isn’t given the chance to work as it should. Nobody knows how much a procedure will cost before it is performed, so patients are left in the dark with unanswered questions and the risk of huge healthcare bills.
You wouldn’t agree to have a new engine installed in your car without knowing the cost of repairs first, would you? More than likely, you would gather cost estimates from a number of local shops to help you make the best choice before agreeing to have the engine installed. By this logic, you’re practicing price transparency without even realizing it. But the point is, this same idea should be true when shopping for and receiving healthcare.
Healthcare Price Transparency—How it Works
An increasing amount of medical services—from MRIs to blood work to outpatient surgery—can cost consumers a lot less if they pay the provider cash upfront instead of through their insurance. Cash payment is a great option for those in high-deductible plans.
Like patients, healthcare providers end up financially ahead by charging cash-pay consumers less than the insurer-negotiated rate for some health services. Cutting out the insurer as the middleman significantly reduces the provider’s administrative and billing costs. Not to mention, providers who get cash upfront don’t have to chase down the patient or insurance company for the payment later.
The future of cash-pay medicine is bright, as more and more providers begin to offer a variety of cash-pay services. The cash-pay option, combined with price transparency in healthcare, would ensure consumers get care at an affordable rate and can choose the best price and the best provider for their condition.
To give consumers a seat at the table in the conversation about healthcare services, clear information regarding the price and quality of healthcare is a necessity.
The Healthcare Financial Management Association defines price transparency as “readily available information on the price of healthcare services that, together with other information, help define the value of those services and enables patients and other care purchasers to identify, compare, and choose providers that offer the desired level of value.”
Patients often don’t know what they will owe for their doctor’s visit, diagnostic test, or surgery until they actually receive the bill weeks later. This knowledge arrives too late—after it’s all said and done. It’s clear that price transparency is essential. It’s essential for any competitive, well-functioning market, including healthcare markets.
Price transparency allows patients to shop for the most effective, cost-efficient healthcare available while driving down prices as providers compete for patients. This is true consumer empowerment. This, combined with cost control, has made price transparency a common goal for policymakers and patient advocacy groups…
“Big Players” in Price Transparency
The federal government’s recent decision to publish the rates charged by more than 3,000 hospitals is just the tip of the healthcare price transparency iceberg. Employers, consumer groups, state governments, and health insurers have also worked toward making the prices of medical services more public.
The Center for Medicare and Medicaid Services (CMS)’s new rule urges hospitals to be even more open and transparent about the costs of their services. Hospitals must publish their list of prices on their website in a machine-readable, or computer-friendly format.
Unfortunately, this didn’t help us out too much. What occurred is a mass confusion surrounding impossible-to-navigate lists of thousands of services posted on thousands of hospital websites. As it stands, these lists are not relevant to patients in their current form. This negates the idea of healthcare cost transparency. If patients can’t decipher the jumbled content on the unending lists, there’s hardly any need for them in the first place.
Steve Wojcik, vice president of public policy with the National Business Group on Health (NBGH) in Washington, D.C, states, “The demand for real transparency is there, but there is also frustration, information is out there, but it is still not [delivered in] real-time or personalized, and costs vary depending on where you are, with no rhyme or reason for those variations.”
Shopping for Healthcare
The majority of healthcare is not in a shoppable format as consumers aren’t readily given the information needed to make an informed decision. Plus, price information for emergency care and specialty care for those with complex conditions is especially hard to come by and especially confusing for consumers to understand.
Even when healthcare is shoppable, like in the cases of elective surgeries, prescription drugs, and diagnostic testing, consumers rarely use the price comparison tools made available to them. When they do, skepticism tends to follow. Although a quick search of “How much will Lasik eye surgery cost?” may bring results that are somewhat on target, the question remains: Is this estimate even accurate?
And let’s say healthcare prices were straightforward and easy to understand at the start. This would be awesome, but consumers would still need information about the quality of different services to make the best decision possible. Without interpreting both quality and cost information, patients can often default to the highest-cost provider. We think if something’s more expensive, it must be better. But that’s not always the case since research proves how high health care prices don’t correlate with high care quality.
Benefits of Clear Healthcare Price Transparency
- You get access to information regarding the quality and price of a service
- You can successfully compare the price of services among providers to find the best fit for you
- Trust is better established between you and the provider
- Takes the surprise out of surprise bills
- The overall price of services will gradually decrease as providers compete for your business
The Future of Price Transparency
In November 2019, federal agencies proposed the Transparency in Coverage rule. This would require employer-sponsored group health plans to make pricing available through an online self-service tool. This tool would help users shop and compare costs for services before receiving care. This is great, but the fight for health care price transparency is far from over. But as more pricing data becomes available, the healthcare market will finally change. Finally, information on the quality and prices of services won’t be such a mystery.
ZeaMed believes that finding a path to thorough healthcare price transparency is the only way to bring the power back to the people. We want you to know what’s at stake when price transparency is not readily available, and we want you to rise above this long-standing pattern in our healthcare history.
For more information, visit Hospital Presentation