By Christine Cooper, CEO and member; and Jack Towarnicky, member, aequum LLC.
Effective healthcare consumerism requires timely access to accurate provider and hospital fees and estimated out of pocket costs of services – before receiving care. Price transparency puts employer-sponsored benefit plans in the driver’s seat, empowering participants with information that helps them be more prepared, involved and informed in proactively making cost-conscious decisions about their health care options and utilization.
This empowerment is especially important in today’s economy. Many workers are “financially fragile” and have not set aside savings specifically earmarked for out-of-pocket medical expenses, including regular cost sharing – deductibles, copayments, coinsurance. As healthcare continues to see rising cost inflation, price transparency is more in the spotlight, triggering a (re)introduction of healthcare consumer strategies. By taking advantage of price transparency, making comparative cost and quality information available, and capitalizing on cost containment opportunities, plan sponsors and their participants can fully optimize the value of their health benefits plan.
Taking Advantage of Price Transparency
There is complexity in healthcare due to a lack of price transparency. This is especially prevalent in medical billing. Health policy changes have been enacted to make cost information in the healthcare industry more easily available to consumers with the expectation that price transparency will provide better metrics for healthcare spending. The appeal of price transparency is based on the view that increased consumer choice and less information asymmetry will aid in achieving higher-quality, lower-cost health care.
Legislation is now in effect to better enable Americans with knowing the true cost of provider health services before receiving care and submitting a claim. Federal law now supports employer-sponsored health plan access to price transparency with added levels of protection and fairness. Executive Order 13877—Improving Price and Quality Transparency in American Healthcare to Put Patients First, significantly expanded the requirements for hospital and other medical provider price transparency.