Electronic Health Reporter

By Abhinav Shashank, CEO, Innovaccer.

The healthcare circles in the United States are reeled up by debates around the need for price transparency.

The federal agencies are coming up with regulations.

Healthcare associations are weighing in their concerns.

Physicians, patients, and economists – everyone is articulating the pros and cons in a rather plausible manner.

Wait. What has triggered this rush towards transparency?

To begin with, the healthcare costs across the country have gone from “extreme” to “unreal” in the last two to three decades. A regular MRI scan, for instance, costs twice as much as it does in Switzerland, another country where healthcare is considered “notably expensive.”

Worse still, one simply cannot tell how much money they might end up paying at a healthcare facility at any given point. A broken bone can take thousands of dollars to get fixed or at no cost at all – depending on a dozen factors that can vary drastically with each patient.

Frankly, there is no single moment that burst the bubble around the soaring healthcare costs. In many cases, what hurt patients more than the total cost of a procedure is the out-of-pocket expense that they are made to pay. The focus today has shifted to one fundamental question – how much money is justified for a given care procedure; and are we entitled to know it or not?

Cut to 2019, a movement to make care prices transparent is shaking the establishments across the US.

What is the government saying?

The government has taken the onus of ensuring transparency in healthcare prices. Last month, the White House issued an executive order aimed at making payers and providers publish the cost of each procedure available at their facility. The government believes that this step can get a long way in making patients take more informed decisions regarding their health and eliminate the opacity regarding the cost associated with such processes beforehand.

The intent here is to provide patients “access to useful price and quality information and the incentives to find low-cost, high-quality care,” something that can be a giant leap forward in the direction of enabling cost-effective care.

The patient should know the estimated cost before signing up for treatment 

The HHS secretary is expected to propose a rule requiring healthcare organizations to declare their negotiated charges in a digital manner. Such charges shall include costs for services, supplies, and fees.

“For decades, America’s healthcare system has kept price and quality information secret from the patients who need it. Healthcare experts all across the political spectrum have long agreed this has to change,” said Alex Azar, the HHS secretary, in a press release.

Many Americans over the years have been a victim of “surprise medical bills” and such an act can indeed safeguard them in this regard. However, much of it would depend on its implementation, and many critics are even skeptical about the very idea.

What are the critics saying?

There are various theories that are keeping the critics of this ruling busy. Some of the most prevalent ones include:

1. The most common sentiment is that it would demean the sense of competition and result in higher prices. When exhaustive data on costing would be available for everyone, hospitals would have traditionally been charging much less than the general regional benchmark would start exploring the idea of reducing the cost delta and strike a more lucrative deal with the payer.
2. For patients who prefer a particular physician for a particular care procedure, the difference in costs at two different places will mean little.
3. For a particular care procedure, costs can vary for each sub-process. For instance, if a person is being operated for a particular ailment, Hospital X may charge more for the diagnosis process and less for the medicines used, while Hospital Y may charge differently and end up providing the overall services at a similar cost.
4. More than the total cost of the care procedures, patients are more interested in learning about the out-of-pocket expenses that they’d be paying.

Most critics, however, want to ensure a smoother care delivery experience for patients, and the stage looks set for constructive debates around this proposal.

Empowering patients with information is, despite everything, a need

Consumerism in healthcare is slowly gaining traction. Healthcare shopping is becoming more personalized based on patients’ needs and preferences, and healthcare organizations are embracing their personal preferences with open arms. Engaged patients are actively participating in their care journeys which is opening doors for innovation in care procedures earlier assumed to be too “rigid” to be changed.

Price transparency initiatives, if enacted properly, can set an example for more such models that put patients at the center of care to expand. However, the real challenge here is to prepare a common ground for each healthcare stakeholder, including payers, providers, and patients, to work together towards a collective goal.

Optimizing care costs while delivering the highest standard of care require collective measures, and for that, we need an evidence-based approach. Each stakeholder should be clear about three basic questions right from the time they get involved in a particular care procedure:

1. It this process necessary to improve health?
2. Is this the best possible way to achieve the best possible outcome?
3. It is the most cost-effective way?

While each one of payers, providers, and payers can have a different outlook towards each of these three questions, we should work towards identifying ways to bridge this very gap in opinions.

The road ahead

Price transparency is indeed a necessity to control healthcare costs. If we are to revamp the current care paradigm for the better, such initiatives should be welcomed after a thorough analysis of the grassroots reality. The years to come should be dedicated to testing deep waters for making healthcare more quality-driven and cost-effective. The initial hiccups are bound to shake the ship; however, much of our future will depend on the intent by which we all move forward.