Pricing Transparency in Healthcare Reform
Apr 22, 2015
Pricing Transparency in Healthcare Reform
Many Americans don’t know exactly how their healthcare
providers come up with prices.
According to a recent report by non-profit Catalyst for Payment Reform, this is the fault of the providers themselves, who are rarely
transparent with their pricing methods.
They recently gave 45 US states a failing grade for neglecting to provide a way for patients to understand their expenses.
If patients had access to data like this, the argument goes, they would be able to properly budget for care
down the line.
As it stands now, they are victims of prices as care is
needed.
What this failing grade means is this: if you live there, you cannot
readily find healthcare prices.
With healthcare reform, more of the cost of care is shouldered by patients,
which makes meaningful price information more important than ever.
In the same way that consumers need to understand pricing of any
product they buy, they need to know what healthcare will cost them,
particularly since we can expect
healthcare to be one of life’s biggest
expenses as we age.
What’s standing in the way are
confidentiality agreements by
insurers, doctors, and hospitals.
Price negotiations are kept behind
closed doors, and intentionally kept
secret.
What results is that consumers won’t
have data to be able to choose care
providers.
One reason this data would be important is
that the same procedure could have different
prices from hospital to hospital, or from doctor to doctor, with no difference
in quality.
Sometimes the amount a
consumer’s insurance company
will pay can vary too, based on a number of factors currently not available to the
public.
Larger hospitals or hospital systems
have greater leverage to get
higher reimbursement
prices from insurers.
That extra money is paid by employers
and consumers with higher premiums and
deductibles.
There has been a recent wave of
legislators bringing prices for such care
to the public, through laws
requiring transparency.
Information repositories, also known as ‘all payer claims databases’ are
being constructed, providing accurate and complete information
about pricing by hospital and physician.
As of now, such public databases are
only in Colorado, Maine,
Massachusetts, Vermont, and
Virginia.
Florida is an interesting case, as
they’ve built a database, but still received a failing
grade.
Their site is managed by the Agency for Health Care
Administration, and has been deemed to contain
too narrow a scope of information, as well as
being a clunky site.
What information is present is not well displayed, or very
helpful.
Florida’s legislators are also not seeking transparency from insurers, which is a necessary piece of the transparency
puzzle.
Without this information, consumers only know
how much the care costs total, not how much they can expect to spend out
of their own pocket.
Pricing Transparency in Healthcare Reform