By MATTHEW DALE
Did you know that as of January 2021, price transparency is being mandated for hospitals? But what exactly does that mean for company healthcare plans, third-party administrators, healthcare sharing organizations, employers, and employees?
It means U.S. hospitals are now required to provide clear, accessible pricing information online about the items and services they provide in two ways: 1) as a comprehensive machine-readable file and 2) in a display of shoppable services in a consumer-friendly format.
The Centers for Medicare & Medicaid Services are already requiring hospitals to publicly display their negotiated rates with insurers along with the cash pay price for over 300 shoppable medical services.
For healthcare consumers, this should mean they can shop for the hospital that performs the best knee surgery or other medical procedure for the lowest cost in their area. Unfortunately, the implementation of price transparency has been difficult, to say the least.
The American Hospital Association and other industry groups have spent large amounts of money to block the rule but were unsuccessful. Now, hospitals are trying to get around the rules. A Wall Street Journal investigation found that hundreds of hospitals implemented website code to block search engines from returning results for price inquiries.
Technically, hospitals are following the price transparency rule, but by deliberately hiding data from search engines or making it nearly impossible to find, consumers are unable to locate a hospital or surgery center they can afford. That’s just one example of how hospitals are avoiding price transparency. The AHA has made it clear they are not happy with price transparency and they’ll do whatever they can to avoid this new rule, but why?
Listing prices increases competition and there’s more money to be made when prices are not available. If patients can’t see the procedure price, they’re most likely going to choose the most prestigious or well-known hospital. They’re going to find the hospital that’s great at advertising even if that hospital is the most expensive in their area. That facility may have the same quality and outcomes measures as another down the street, that charges significantly less. When patients can easily see prices, the most expensive hospitals will inevitably lose patients and money. Additionally, hospitals have also urged the current administration to reverse price transparency because they don’t want people to see their negotiated rates with insurers. It raises serious questions when Medicare says a procedure should cost around $6,000 but a hospital charges $80,000 instead based on who’s paying.
If hospitals are preventing search engines from locating prices, creating confusing lists that consumers have to click through multiple pages to find, or simply not adhering to the price transparency rules and opting instead to pay the daily $300 penalty, how is price transparency going to help healthcare consumers?
Platform technology is the answer. The ideal solution is a single, comprehensive platform for consumers to review all procedure prices across hospitals around them. This might sound like a fantasy, but my company Point Health has created a Smart Healthcare Platform that allows consumers to shop for thousands of healthcare services. And we’re not the only ones who see value in platform technology; companies like RxSaver, GoodRx, and Healthcare Bluebook also have solutions to help consumers make better healthcare decisions.
Price transparency can create the most impact for health plans, employers, health sharing organizations, and third-party administrators by creating plans that encourage patients to shop for care. When these entities use technology and services that promote healthcare consumerism and patient empowerment, we’ll see simplified and more widespread price transparency. Ultimately, price transparency is just one big step towards better healthcare for all.
Matthew Dale is the CEO of Point Health.