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By Paul Boal
Imagine a grocery store where no items had price tags: You’d have no way of knowing what you were expected to pay until you saw the total amount at the checkout.
That scenario sounds almost unimaginable to most of us, but it’s been playing out in the world of healthcare for decades. Patients and their families frequently have no idea what they’re expected to pay for procedures until after the fact. They’re essentially unable to “follow the money,” which is a problem. It puts their finances and health at risk. Fortunately, this is changing thanks to a push for greater price transparency in healthcare.
Still, as with all major changes involving several stakeholders, the move toward price transparency hasn’t exactly been fast. However, there’s good reason to believe it will gain momentum soon. In the past year alone, our company’s internal data processing has found that up to 20% of hospitals are posting updated, useful data (which includes pricing information) monthly. As a result, payers and advocacy groups are looking at the data carefully to better understand healthcare prices and compel greater compliance.
What does this mean for the average person? By the end of 2022, a bigger portion of Americans will be able to enjoy more control over their healthcare spending. Additional regulations are going into place in July, and once they take hold, consumers should be able to have a more “shoppable” healthcare experience that allows them to weigh providers based on multiple factors — including price. In other words, our country will finally get closer to true healthcare price transparency and enjoy the resulting advantages.
Price transparency measures should lead hospitals to create PR campaigns about their pricing and price transparency efforts. These will undoubtedly include a wealth of information to enlighten the public on the value of their services. The Mayo Clinic, as one example, is already leading the charge.
As more consumers choose their preferred providers based on this information, hospitals may move toward more specialization, too. This type of “healthcare solution destination” is happening in niches already, as shown by Walmart’s Centers of Excellence initiative. Ultimately, these improvements, fueled by compliance expectations, will lessen the number of healthcare-related bankruptcies — something that can benefit everyone involved.
Of course, to get all the benefits of price transparency in healthcare, we have to reevaluate how our healthcare system currently operates and identify the very real dangers of the way things work right now. One of the biggest problems? Excessive spending and waste. Our healthcare system currently produces an incredible amount of waste. People consume healthcare in a counterproductive way — receiving too many services and unnecessary treatments — and the system itself uses people and technology inefficiently. There are too many parties with conflicting interests and too many that are solely profit-driven. In the end, health outcomes don’t improve as they should, and both hospitals and patients end up spending (and wasting) more money.
What is the end goal? That this disconnect becomes less severe as we not only examine healthcare pricesmore closely,but also begin to unravel the other nuanced factors that drive up costs. This could include anything from unnecessary treatments to inefficient use of people and technology. The more streamlined and clearer everything becomes, the easier it will be to make healthcare work for everyone.
It is challenging for healthcare systems to determine exactly how to comply with price transparency regulations. Some stakeholders have set a good example, though. One large West Coast payer we work with has invested hundreds of hours digging into the price transparency data in its regions and is using the data to identify hospitals offering the most useful, relevant services (for the best prices) to consumers.
Another large payer in the Midwest spends time every month reviewing large sets of data to identify discrepancies between what its largest hospitals are publishing and their internal rates. They then issue a report to hospital partners indicating which data appear to be inaccurate. It also looks at gaps between its prices and the prices its biggest competitors are paying each month for common services. If their strongest partners don’t have the best prices, they enter renegotiations.
It’s clear that many forces are coming together right now to make price transparency in healthcare a reality. Though it’s still an uphill climb, it’s moving toward the summit in a meaningful way. Once there, we can move the ball faster to create a healthcare system that’s effective, open, responsive, and fiscally responsible for all.
Paul Boal is the vice president of innovation at Amitech Solutions. He has two decades of experience in information management, analytics, and operational solutions; he’s also an adjunct professor of healthcare data and analytics at St. Louis University and Washington University.
The Editorial Team at Healthcare Business Today is made up of skilled healthcare writers and experts, led by our managing editor, Daniel Casciato, who has over 25 years of experience in healthcare writing. Since 1998, we have produced compelling and informative content for numerous publications, establishing ourselves as a trusted resource for health and wellness information. We offer readers access to fresh health, medicine, science, and technology developments and the latest in patient news, emphasizing how these developments affect our lives.