Is Price Transparency the Next “Big Thing”?
Is Price Transparency the Next “Big Thing”?
High deductible health plans are likely here to stay. As consumers pay bigger portions for healthcare, many find it difficult, if not impossible, to pay bills that run into the thousands. When consumers can’t pay, physicians and hospitals suffer. Ten US hospitals and health systems filed for bankruptcy in 2016, and five more have done so in the first quarter of 2017. ,
How do we cut costs to help consumers save money as well as pay their share, and keep our providers and hospitals financially sound at the same time? Richard L. Jackson, chairman and CEO of Jackson Healthcare, a healthcare staffing technology company, shares seven cost-saving suggestions in an article published recently on CNBC.com:
- Mandate medical smart cards
- Standardize reimbursement systems
- Eliminate fraud
- Expand telemedicine
- Allow innovation and research
- Mandate price transparency
- Eliminate all medically unnecessary procedures and tests
Mandate Price Transparency First
While all of Jackson’s ideas can help, price transparency will solve many issues, including eliminating medically unnecessary procedures and tests as well as expanding telemedicine. When people fully understand, upfront, how much procedures will cost and know the exact out-of-pocket they face, they will consider if the procedure is truly necessary, and if it is, they’ll want to find the least-expensive provider.
Most people don’t buy anything without knowing upfront how much it’s going to cost. Today’s consumers are expert at online shopping and comparing prices. Half of Americans have tried to find healthcare pricing information before obtaining services, and 63% of respondents believe there isn’t enough healthcare price information available, according to a study just published by Public Agenda. The group surveyed 2,062 U.S. adults, ages 18 and older, from the states of Texas, New York, Florida and New Hampshire; participants were considered nationally representative. Robert Wood Johnson Foundation and the New York State Health Foundation provided support for the project.
The Robert Wood Johnson Foundation, whose mission is to improve the health and healthcare of all Americans, says:
“Price transparency might have the single biggest effect in informing the public about health care costs and could support a more efficient health care delivery system in the United States.”
The foundation also asserts, “Price transparency tools can be both public and private, but in order to free up the data currently locked in by non-disclosure agreements and contractual limits, states must pass legislation that mandates increased price sharing across providers, hospital networks, physicians and consumers. Increased price transparency combined with reference pricing, the price consumers can expect to pay for services, has shown to put pressure on providers to lower their prices.”
Prices Vary Widely
The U.S. Government Accountability Office asked dozens of healthcare providers about their price for a knee replacement and found that estimates ranged from $33,000 to $101,000. And the higher price may not necessarily mean a better knee, even in the eyes of the consumer. In fact, according to the Public Agenda report, most Americans don’t think prices are a sign of quality in healthcare, with 58% of respondents indicating that if they compared prices they would be inclined to choose less expensive doctors.
Collaboration is Key to Success
Regardless of legislative mandates, price transparency can help everyone in the healthcare food chain. But it’s not enough for one segment to participate. Collaboration among providers, payers, employers, and even state governments will open up opportunities for consumers to shop, save and also pay for services and procedures. When the consumer wins, everyone wins. Especially when they can pay.
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 Ayla Ellison, 10 Hospital Bankruptcies in 2016, Becker Hospital Review, Dec. 13, 2016, http://www.beckershospitalreview.com/finance/10-hospital-bankruptcies-in-2016-decmeber13.html
 Ayla Ellison, 5 hospital bankruptcies, closures so far in 2017, Becker Hospital Review, Mar. 6, 2016,
 Richard L. Jackson, “While Trump and Congress figure out health-care reform, here are 7 ways to rein in rising cost,” CNBC.com, Mar. 31, 2017, http://www.cnbc.com/2017/03/31/reinging-in-health-cares-rising-costs-commentary.html
 “Still Searching: How People Use Healthcare Price Information in the United States,” Public Agenda, April 6, 2017, https://www.publicagenda.org/pages/still-searching
 “How Price Transparency Can Control the Cost of Health Care,” Robert Wood Foundation, http://www.rwjf.org/en/library/research/2016/03/how-price-transparency-controls-health-care-cost.html
 United States Government Accountability Office, “Health Care Price Transparency: Meaningful Price Information is Difficult for Consumers to Obtain Prior to Receiving Care,” Report to Congressional Requesters, Sept. 2011, p. 33, http://www.gao.gov/assets/590/585400.pdf
 “Still Searching,” Public Agenda, https://www.publicagenda.org/pages/still-searching