Price transparency: a win-win for insurers and consumers
Price transparency is more than just an exercise in being up-front--it's imperative to improve the bottom line for any health insurer, says a new brief from the nonprofit, Families USA.
Prices vary dramatically by provider, oftentimes with no difference in quality, leaving consumers with a hard time discerning where to get the most value for their money, according to the brief.
"More expensive providers do not necessarily deliver higher-quality care," writes Lydia Mitts, senior policy analyst for the organization, which advocates for affordable, higher-quality healthcare for U.S. consumers.
"And it can be nearly impossible for consumers to get enough information to compare providers based on both price and quality, or to get accurate estimates of how much they will have to pay before they get the bill," she adds.
Price transparency not only helps consumers, but can also policymakers and other stakeholders hold healthcare providers accountable for setting fair prices, the brief says. There are several efforts underway at the federal and state levels to improve price transparency in the U.S. healthcare system.
According to Mitts, insurers should include the following when making pricing information available to beneficiaries:
- Negotiated or discounted prices that have been set with their insurer.
- Total combined price for care for all of the separately billed services that are included in the delivery of the healthcare procedure they need. For example, if a consumer needs a CT scan, the price estimate should include imaging fees and physician fees for interpreting the scan results.
- The portion of the bill that the consumer must pay through cost-sharing--including deductibles, co-insurance and copayments.
- Guaranteed, binding estimates. A consumer's health plan cannot charge more than the estimated out-of-pocket costs unless the consumer requires additional unexpected services during the course of treatment that have separate cost-sharing. Providing individualized, binding estimate will ensure that consumers have reliable information that they can trust when comparing providers.
In a different report published in Health Affairs, researchers also found that a price transparency plan that involves member outreach can reduce healthcare costs. In that study, researchers presented consumers with plan alternatives to gauge which service the patients would select, based on price. They found that when they presented similar-quality but lower-price alternative services to members, the patients typically selected the lower-priced facilities, FierceHealthPayer previously reported.
- read the brief (.pdf)
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