03 Dec The Arguments Surrounding Price Transparency
The Trump administration’s executive order that aims to make secret negotiated prices between hospitals and insurers public has, of course, it’s supporters and adversaries. Price transparency has for some time now been a goal in the healthcare industry but with many parties who have diverse interests, parsing out valid concerns vs. ones that only come from a place of self-interest can be difficult.
Insurers argue that cost should not be the only factor when choosing care. While that is true, many patients are grappling with trying to afford care in the first place. Real price transparency could help alleviate that, allowing them to focus on other critical criteria when choosing a provider.
Many of the concerns come from long-time healthcare industry lobbyist who clearly have an interest in keeping the status quo while government agencies like CMS are looking for ways to save on cost and provide a better experience for patients. Detractors argue that price transparency would undermine choice by limiting competition, the opposite of what lawmakers are suggesting would happen. “If every contract and every negotiated rate were public, no doctor or hospital would want to be paid the lowest rate — they would all be motivated to demand higher payments. And health care costs would rise for all Americans as a result,” America’s Health Insurance Plans CEO Matt Eyles said in a statement. In the end, no one, of course, can predict precisely what will happen. All most everyday people know is that something has to give; the current system isn’t working and needs to change.
With high deductible health plans becoming more and more the norm for patients, the out-of-pocket (OOP) cost has become more visible and glaring on their pocketbook. Long ago are the days of the Cadillac employer health plans where patients didn’t need to educate themselves on healthcare costs because OOP expenses were minimal. Today the picture is much different, consider that “in 1997, out-of-pocket spending was $589 per capita, growing to $1,124 in 2017.” That kind of shift in healthcare cost responsibility understandably warrants a new system.
The cost of healthcare is not only consuming wallets but also consumer minds noting that “55% worry a great deal about healthcare, topping a list of 15 issues” – issues that include crime, violence, the economy, and unemployment, all of which are usually hot-button topics, especially during election seasons. What makes these healthcare concerns even more compelling is “the percentage [of people] worrying a great deal about the availability and affordability of healthcare has held steady. It is within one point of where it was in 2010 (56%) and has never dropped below 54% over the past nine years.” With insight like that, it’s no wonder politicians are
focusing so much of their platform on the topic.
Hospitals Weigh In
“The current healthcare market is a complex system of secret deals and discounts between insurance companies and healthcare providers,” said Michael Maron, CEO of Holy Name Medical Center in Teaneck, New Jersey suggesting that hospital officials may welcome the new price transparency initiatives. Even when they agree with the new policy and rule changes, hospital officials are often caught in the middle and have to figure out ways of complying and facilitating the changes. While price transparency may look like a simple task of displaying pricing online, there are behind the scene changes that need to be correctly implemented, and unless the hospital has the resources to dedicate to it, it can be difficult.
Sunlit Cove Healthcare can help you implement price transparency requirements, keeping your organization compliant. Give us a call to get started.
Sunlit Cove Healthcare Consultants
We provide management and consulting services to help healthcare businesses run efficiently. Navigating the dynamic and complex revenue cycle management is a challenge for many health plans, health care vendors, and providers. Our consulting services are available to assist with your day-to-day operations and provide expertise in growth and change management. We manage all aspects of your enterprise from the development of the revenue cycle management process to the completion of your business cycle.
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