Delivering on the Promise of Price Transparency

a stethoscope on a wad of US dollar bills, depicting the concepts of the health care industry or the health care costs

By Matt Parker, SVP of Product Kyruus/HealthSparq

As we’ve watched the landscape shift toward greater transparency in healthcare over the past decade, it’s become clear that there’s no easy fix to give people what they need: complete, accurate, and consistent information about healthcare costs and provider options. Health plans and health systems both play a role in sharing this information, and while these entities don’t always play nicely, they are now equally required by law to achieve a new level of price transparency.  

What are the federal price transparency requirements?

In a nutshell: The federal government is taking multiple avenues to help reduce healthcare costs by increasing transparency. They are working to get people access to information on the costs of care, both from hospitals (rack rates) and from health plans (through benefits-specific cost estimates for specific services). Both hospitals and health plans are required to deliver healthcare cost information in different formats so that their patients and members can have an understanding of what it will cost them to obtain care. 

  • On the hospital front: Every hospital operating in the United States is required to provide clear, accessible pricing information online about 300 items and services they provide (70 of which are dictated by CMS, the other 230 are up to the hospital) in two ways: a machine-readable file (not consumer facing) and via a link on their website in a consumer-friendly format. 
  • On the health insurance front: Most health insurance plans (group and individual) are required to post machine-readable files with negotiated rates and out-of-network claims starting July 1, 2022. They will also be required to provide personalized cost estimates (via online tool, print, phone) for 500 items and services starting January 1, 2023, and for all items and services starting in 2024. 

What’s missing from the mandates?

While the goal of this regulation is greater clarity into healthcare costs, simply exposing prices without context does little to ensure people can actually understand the information. First, the prices shared with people by hospitals and health plans will not match. Hospitals are not fully able to share out-of-pocket cost estimates – in other words, the prices they show don’t take a patient’s insurance coverage into account. Health plans do need to show personalized estimates, but people don’t always know the right medical terms to search for. The best scenario for patients is that health plans and hospitals decide to go beyond simply doing the minimum to comply with the mandates, and instead think strategically about the future of what patients and members need: clarity, context and guidance.

Looking ahead: A future for price transparency

So, how can we create the future by delivering what members need and want today? Let’s go with the three c’s: 

  • Conspire: That’s right. What is the future of healthcare YOU want to see? Plot that out. Don’t box yourself in with what compliance mandates dictate.
  • Contextualize: We’ve been talking about the information age since about 1980 – so let’s just reiterate this: information without context is useless. Especially when your financial health depends on it. Offering individuals truly contextualized information about their healthcare costs is what will make the difference.  
  • Collaborate: The cost of care is a relationship between payer and provider. Think about transparency and how it fits together in service of a patient/member. See it as an opportunity to improve satisfaction and reduce friction. It’s a way to expose the right type of information and use the connection between the payer and provider to make it simpler for people to understand to make an informed decision on care.

At the end of the day, both hospitals and health plans will be required to deliver healthcare transparency solutions to people so they understand what care will cost. The goal behind these rules isn’t just to throw numbers in front of people, it’s to help them.

Knowing what something costs upfront before care is a huge benefit for both payers and providers and a huge service to members. Being unsure of costs causes many people to forgo care. Let’s work together to imagine and deliver a future that delivers on the dream of price transparency. 

Bio

Matt Parker is Senior Vice President of Product for both HealthSparq and Kyruus, where he leads efforts to develop and continually improve industry-leading products. Matt has more than 20 years of experience working in healthcare technology products, where he brings a professional passion for streamlining implementations so that customers are up and running with new products more quickly. Prior to joining HealthSparq and Kyruus, Matt was the VP of Products at Connecture, where he lead product management of its SaaS products, including Medicare, individual and family and group shopping, and enrollment products. Earlier in his career, he was the VP of Clinical Products at DestinationRX. Matt earned a Bachelor of Arts degree from The Catholic University of America and his JD from Loyola University Chicago School of Law.