The Trump administration is keeping the celebratory fireworks going with big changes in the health care industry. The White House recently announced an executive order taking bold action to increase price transparency and lower health care costs for American consumers.
The order requires federal agencies to move forward in helping inform patients of actual prices ahead of time and release more pricing data to innovators and entrepreneurs so they can develop tools to help patients better navigate the health care system.
Real Transparency Can Deliver High Quality Care For Less
In a patient-focused health care system, consumers must know what they’re paying for and how it measures up against the competition. Yet most Americans don’t know the cost of their medical procedures or medications until after the fact. Without that knowledge, consumers are unable to make informed health care decisions—often putting off care or paying highly inflated rates when they do seek care.
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Let’s be clear—consumers want to seek out this information. National surveys show that 82 percent of voters want the right to know the cost of non-emergency procedures ahead of time. Seventy-two percent of voters want the ability to pick out-of-network providers if they offer a better deal.
Health care special interests are actively withholding pricing information and are fighting its disclosure by spending millions on lobbying to kill or water down the President’s efforts.
But the American people want this transparency.
At the end of the day, the success of this executive order will hinge on the policy’s implementation. Rather than trying to recreate the wheel, federal agencies and Congress should look to similar models implemented at the state level for best practices.
Trump Administration Should Learn From State “Right To Shop” Transparency
For a case study in price transparency gone right, we should examine “Right to Shop” reforms that have passed in numerous states with wide bipartisan support. Right to Shop gets transparency right in three key ways.
First, real prices are disclosed ahead of time for most services—not averages, or the top 100 services, and not just estimated out-of-pocket costs. Instead, patients are given information on what a provider or hospital will be paid under their specific insurance plan, and what price it would be if paying with cash.
Second, patients can compare prices between providers and care locations. In many instances, location A is paid $3,000 for an MRI, location B is paid $1,500 for the same procedure, and location C is paid $450—all for the exact same quality service. When armed with the pricing of multiple options, patients and their doctors can make the best decision together. This is especially important when the patient has a deductible, as they are the ones paying and rightly deserve to be able to compare costs.
Third, patients are directly rewarded when they pick a high-value option. In the example above, if they pick the $450 option, the patient is rewarded with a “shared savings” check in the mail or a premium reduction for doing so.
A diverse group of states—including Arizona, Florida, Maine, Massachusetts, Nebraska, Tennessee, and Virginia—have already passed some version of these meaningful reforms. Kentucky’s price transparency tool for public employees saved state taxpayers $13.2 million and paid out nearly $2 million in shared savings to patients in the program’s first three years alone.
Savings Under Transparency Means More Jobs
President Trump’s executive order stops short of rewarding patients for shopping around. However, these state initiatives should serve as valuable guideposts to drive the next policy steps that come from the price transparency executive order to deliver better quality care for less.
When people have the information needed to make smart health care decisions, millions of individuals and businesses benefit, including the uninsured and the chronically ill. Families will have more money to pay for gas, food, and education. Small businesses can hire more employees or raise the paychecks of existing employees.
The health care marketplace is not exempt from the basic rules of economics, and it’s refreshing to see leadership willing to acknowledge and make positive changes based on this simple truth.
Date: July 17, 2019
Source: Forbes