As expected, healthcare will play a major role in the 2020 presidential election. The Trump administration has made moves to tackle one of healthcare’s biggest issues: price transparency. Late last year, he unveiled a finalized price transparency rule, which will take effect Jan. 1, 2021. While that’s still almost a year away, a recent IBM survey reports that 77% of healthcare organizations are actively preparing for the price transparency rule to take effect.
Today’s blog will be the first of several blog posts from Patientco about price transparency. Given my experience as a medical doctor, I’ll start by sharing some insight about what the new price transparency rule means for patients and for health system executives like you. Let’s dive in.
What Today’s Price Transparency Rule Means
The rule requires hospitals to disclose their negotiated rates and provide patients with easily accessible information about standard charges. This includes making all standard charges available in a single data file that can be read by other computer systems, as well as making “shoppable services” information available on their websites. However, there’s a caveat to this price transparency rule. These are just the hospital’s chargemaster prices. They don’t actually help the patient understand what their out-of-pocket cost will be. For example, if I have my gallbladder taken out there is not one billable code for the procedure by the hospital and the physicians so the total cost of that procedure is not going to be clear by looking at the website. It is multiple codes by multiple different entities.
For this reason, there’s a second proposed price transparency rule that would apply to health plans. This proposed Transparency in Coverage rule would require most employer-based group health plans and health insurance issuers to disclose price and cost-sharing information. Health plans would also need to share their negotiated rates for in-network providers and amounts paid for out-of-network care.
The Rule Won’t Solve Everything
All that said, greater price transparency is a step in the right direction for patients. They should be empowered to make educated decisions about where they go for care. However, while these price transparency rules will empower patients with better upfront information about the cost of care, these changes won’t necessarily make care more accessible.
Put simply, there’s still an affordability crisis happening in healthcare. The price transparency rules will just help patients understand their financial responsibilities upfront. This means health systems will still need a personalized, but scalable approach for addressing patients’ financial concerns. Each patient has unique financial needs and therefore, requires personalized financial care. But, the trick is providing that personalized financial care in a scalable way.
A Powerful Combo: Price Transparency & Personalized Financial Care
Think about it like this – our government is laying the foundation for better price transparency, but it’s up to health systems to build on that foundation. There’s still a lot we can do to humanize healthcare, beyond the price transparency rules. A big part of that involves helping each patient understand what they will owe and why they owe it, and finding payment options that work for them. That said, healthcare is not solely about price. It is about value, which means both quality and cost of care must be considered. Sure, I might be able to find the cheapest MRI, but is the quality of the image and the radiologist reading it any good? All of these factors influence when, where and how patients receive care.
Keep in mind, this is just the beginning of the conversation. Stay tuned for more insights on how our industry can address the need for greater price transparency!