Price transparency is no longer a luxury, but a necessity

Price transparency is no longer a luxury, but a necessity

The growing concern about reducing the cost of healthcare delivery is the major focus in revamping the U.S. healthcare system.

There have been numerous attempts to better understand the key drivers contributing to rising healthcare costs, yet the ability to successfully control the rising trend has been met with consistent challenges.

A key motivating factor of the Affordable Care Act was to drive greater accountability of insurance carriers and to limit their ability to continually raise premiums. Beginning in January, insurance companies will begin an aggressive campaign to recruit new members as a means of compensating for the costs they incur by accepting individuals with preexisting conditions and dependents.

Consumers will have to better educate themselves about the various insurance options in order to better manage their health needs. Unfortunately, the information they will need about the “real” price of services is hardly transparent.

Although many companies have emerged that claim to provide data about price variations of various services (as an example, what’s the best deal on a colonoscopy in Washington, D.C.) the data has been limited and consumers have made little use of what data has been available.

The challenge in providing information about true price and discounts is that insurance companies are often reluctant to share this information, which is considered proprietary.

Furthermore, there are often negotiated discounts between insurance companies and larger physician groups and hospitals that are customarily not disclosed for competitive reasons – another reason for reluctance to publish these prices.

For physicians who are in solo practice and are trying to compete for more business, it does make sense for them to share price information in order to attract more patients and be competitive.

As the new health insurance exchanges are put in place and consumers are coerced into participating, the need for absolute price transparency will be a prerequisite, and not a luxury that will predict the ultimate success of how free market dynamics will work.

Providing limited information to consumers could potentially cause more harm than good, and so it will be prudent for all stakeholders to recognize the importance of making available all of the information so that consumers can make educated decisions about their health choices.

Although the Affordable Care Act has put in place measures to assess the quality of care being delivered, it is equally prudent that parameters are established for the required exchange and availability of data between employers, insurance companies, doctors, and consumers to ensure that health insurance exchanges are providing a consistent experience to every consumer.

Sreedhar Potarazu is an ophthalmologist and founder and CEO of Vital Spring Technologies

Image credit: Shutterstock.com

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  • http://www.facebook.com/people/Steven-Reznick/100000549195050 Steven Reznick

    Solo practitioners sharing price information is called price fixing and I believe it is against the law?

    • Edward Stevenson

      This is far more myth than reality, as no one is taking the grocery store to court for putting prices on the shelf. arizona vs maricopa medical society case states that if private doctors share negotiated reimbursement and then align prices according to that information that it would constitute price fixing. this has rarely gone to court, it is very difficult to prove and the cost of litigation almost never justifies the cost of potential economic damage of the price fixing. sadly the undue fear of litigation has stiffed economic advancement in medicine.

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