The following content is sponsored by Save Our States and written by its executive director, Trent England.
Why does the price of healthcare keep going up? We all pay, whether in rising insurance premiums, out-of-pocket charges, higher taxes, or both private and public debt. Yet now a simple idea—price transparency—could bring costs under control.
The biggest single driver of rising healthcare costs are hospitals, which account for nearly a third of healthcare spending. Add in physicians and clinics and you’re over half. One thing these providers often have in common is a reluctance to provide real prices before patients make treatment decisions.
Americans shop and compare prices for every other purchase. Why, for medical care, are we kept in the dark? Even employers that provide health insurance for workers and families find it hard to negotiate better plans or detect improper payments due to the lack of transparency.
Politicians have been talking about healthcare reform for decades. They passed the so-called Affordable Care Act, which actually pushed prices up while trying to hide them with taxpayer-funded subsidies. Other measures—often highly complex reforms—have done little, at best. Yet today, the very simple idea of price transparency is gaining support from thoughtful members of both political parties.
All this reform asks is that we get to know what things costs.
Price tags are protection from surprise billing. They also let patients compare and often save money. And real pricing information would help employers find better plans, leaving money in employees’ paychecks instead of sending it to insurance premiums that ultimately pad hospital revenues.
I’ve seen it myself. Last year, my doctor recommended a minor outpatient surgery. Many Americans have been conditioned to do whatever a doctor says, then cross their fingers hoping insurance will foot most of the bill. This lets doctors and hospitals charge more and more, and then blame insurance when premiums inevitably go up.
Instead, I asked for a price. The doctor’s hospital gave me an “estimate” of more than $10,000. Yet when I reached out to our local surgical center, their guaranteed price was $3,200.
Why do hospitals hide prices? My story makes it clear, and it isn’t complicated: when prices are hidden, prices go up.
That is why work now underway in Congress is crucial. This month alone, House and Senate committees will consider bills that could give us real prices. It is crucial that these reforms remain intact, and strong. Healthcare price transparency requires that prices disclosed be accurate, complete, and actionable. There are some strong proposals, but others fall short.
Healthcare providers often claim to publish prices when really providing almost useless data. Patients shouldn’t need an economics or computer science degree to decipher healthcare prices. Hospitals that play these games deserve scorn, scrutiny, and action by Congress to stop their shenanigans.
Patients need a legal right to know the costs of treatment up front. Medical bills should be unenforceable if pricing information was unavailable. Patients must also have a right to know actual negotiated prices, and the formulas and methodologies that affect these costs. Individuals and employers choosing insurance plans need to know what treatments cost so they can work to control those costs and spot fraud and abuse. And all this pricing data should be updated regularly—at least every month.
Congress should also restore transparency requirements that previously applied to clinical labs, imaging centers, and surgical centers. Whether an MRI or blood test happens in a hospital or somewhere else, patients deserve price transparency.
Another piece of this reform would require greater disclosure of financial arrangements involving third-party administrators, subsidiaries, and subcontractors, codify the “Explanation of Benefits,” and require standardized, itemized provider bills. These provisions would let Americans compare their final bill with the “Advanced Explanation of Benefits,” which is already required in federal law, to give consumers the ability to fight overcharges and errors.
Finally, Congress should require healthcare executives to certify the completeness and accuracy of their pricing data and establish consequences for violating the law. After all, patients are held accountable for medical bills—healthcare executives should be held accountable for publishing accurate prices.
Congress has an opportunity to stop nibbling the edges of price transparency and actually do it—delivering simple, powerful healthcare reform. This is about changing the culture in American healthcare, for medical providers, insurance purchasers, and patients. Hidden prices always become higher prices.
Americans need more than vague promises of transparency in healthcare. We need price tags.
