Recent rules requiring price transparency give consumers more access to healthcare prices than ever. But it’s important to parse out the impact of this new information. Crude versions of price transparency are unlikely to motivate consumers to shop based on costs, as their choice is limited by their physicians’ admitting privileges.
It Helps you Make Informed Decisions
When patients know the costs of different procedures, they can better decide which services and providers to choose. This can reduce healthcare spending by encouraging consumers to shop for the best prices and quality.
Despite some industry opposition, healthcare price transparency is crucial to improving our healthcare system. By empowering patients, reducing costs, and improving the quality of care, it has the potential to transform the way we deliver healthcare. However, not all forms of healthcare price transparency are created equal. Crude versions that post lists of hospital charges could be more useful to consumers. To be truly impactful, transparency should include prices and information about quality and outcomes. This will allow consumers to make informed choices about their care and enable providers to improve their network offerings. This will create a more sustainable and high-quality healthcare system for everyone. It will also empower physicians to negotiate lower rates for their patients.
It Helps you Find the Right Care
Patients can avoid surprise medical bills and budget more accurately for healthcare services when they know the price they receive. This healthcare pricing helps create a competitive marketplace where providers are pushed to offer more affordable options and deliver quality patient care. The hospital pricing transparency mandate under the ACA and the No Surprises Act requires hospitals to post their “chargemaster” or list prices online in a machine-readable format, as well as provide an out-of-pocket cost estimator tool and payer-specific negotiated rates for at least 300 shoppable services. The mandate and the new transparency rules also require health plans to share this information with enrollees by providing a personalized out-of-pocket cost estimate, including underlying negotiated rates for at least 500 services. Whether you’re a provider, price transparency is a way to build trust and engagement with your patients. A transparent billing platform simplifies compliance with these mandates and the No Surprises Act’s good faith estimate requirement. It can even help improve your financial performance by automating patient cost estimates, payer underpayment detection, and contract optimization in one place.
It Helps you Save Money
In addition to helping consumers make informed choices, transparency tools might save employers’ health benefit costs by reducing their employees’ out-of-pocket medical spending. However, it is important to note that these savings are not immediate and may depend on other factors besides price alone. For example, the current federal price transparency requirements do not include quality information alongside prices, a critical factor influencing patients’ behavior. Consumers shopping on price alone might assume that higher prices correlate with better quality, a tendency that can undermine the goal of saving money by reducing unnecessary care. Moreover, revealing actual payer-negotiated rates might push high-cost hospitals to lower their prices in future negotiations with companies or employers, which could result in savings. In addition, employers can utilize this data to create networks of providers offering value and bolster their position when negotiating with carriers. This can also help them develop employee cost-saving programs and generate competitive pressures on providers to keep costs down.
It Helps you Manage your Health
The most important advantage of healthcare price transparency is that it helps patients manage their health. Giving them the information they need to budget accurately allows them to avoid surprise medical bills that can be financially devastating. The healthcare industry has been attempting to promote pricing transparency with initiatives like reference pricing, which requires providers to publish their list prices online and disclose their negotiated rates to help consumers shop around. These initiatives are a step in the right direction but still leave gaps that can be filled by increasing consumer awareness and accountability through improved communication.
For example, many hospitals must include ancillary services on their list prices or present them in a machine-readable format, making them less effective. Additionally, most people need help understanding billing codes and terms to negotiate their medical bills accurately. Fortunately, the No Surprises Act and new transparency mandates for healthcare plans will close some of these gaps and empower consumers to anticipate costs better before they receive care.