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Decoding Healthcare Price Transparency

Could greater price transparency have prevented or reduced this $12,000 ER bill? Possibly, but in an emergency care scenario, it’s tough to say. Certainly, there are more cost-effective options such as urgent care, but most reasonable people will get the care they need when they need it, regardless of the cost.

When I came across the experience of this family a few weeks ago, it got me thinking about the issue of price transparency in healthcare. Consequently, here’s the first post in a new four-part series exploring the business and technical forces working against price transparency, and how health information management could play a vital role in the broader solution to the issue.

A Costly Disconnect
In so many other care situations the patient has time to make decisions and is incented via deductibles and out of pocket costs to pursue medical pricing information as part of an informed and cost-effective decision about their care. Emergency care is an obvious exception, but certainly not the only one. As a patient, I want more transparency about the prices I pay for care—whatever the circumstances. Increasingly, state governments and consumer advocacy groups are wanting the same thing, but there are some significant forces working against them.

I think of this from a customer experience perspective and my mind immediately goes to the travel booking experience. Before the Expedias and Tripadvisors gained popularity, we called a travel agent, hotel or airline directly to get prices and options for our trip. We may have even looked in the newspaper for ads about prices to various destinations. At least when booking travel in "the old days," you knew what to expect before writing the check.

In healthcare, most people know their copay, maybe they know their deductible, but do they have any clue about the cost of a procedure or a doctor visit? The answer is a resounding no. In our current healthcare model, the doctor resorts to sending your health insurance claim to the insurer who then determines your cost in a backroom and sends you a bill. Can you imagine traveling to Cancun for your 20th wedding anniversary and getting a $12,000 bill when you get home after the airline, hotel, shuttle and restaurants all decided what they were going to charge you? Seems ridiculous doesn't it? I will give credit to some health insurers that have the “know your cost tools,” but those are typically confusing to use for the average consumer, aren’t readily available at the point of care, and represent only the in-network care scenario.

Building Momentum for Change
Several state governments think this is ridiculous too and have started healthcare pricing transparency efforts. One of the leading states, Maryland, created the Wearthecost.org tool. While this tool is limited to pricing on four of the most common procedures, it is a step in the right direction. For a state that scored a B in the Robert Wood Johnson foundation's 2016 evaluation of price transparency, they are one of the leaders in this space. An even more telling result of this study? 45 states scored an F.

I'd advocate for greater price transparency in healthcare so the patient can truly become a consumer of healthcare. Consumer sovereignty is a key part of the economic equation, but in healthcare today it is really hard to be a consumer when you have don't have access to the information needed to make smart decisions. Shopping based on faith will continue to fail others until enough improvements are made in medical cost price transparency that no one gets stuck with a surprise $12,000 bill.

Check back soon for part-two in this series to learn more about the forces working against price transparency. Have anything to add to the discussion in the meantime? Leave a comment or shoot me an email!



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