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