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Can Healthcare be Transparent?

Can Healthcare be Transparent?

Posted: March 19, 2018

When’s the last time you went to a car mechanic and agreed to let them do whatever they wanted without asking about, or caring about, the cost? Seems nonsensical, right? Unfortunately, that’s exactly what happens in healthcare every single day.

Over the last ten years, Americans have experienced a staggering rise in deductible amounts. Specifically, teachers in Wisconsin, who at one time had a $0, $100 or $200 deductibles are now facing deductibles as large as $10,000 per family. With these large deductibles, people are forced to make deliberate decisions about their healthcare spending—and with that, comes the demand for transparency in the health care industry that Americans so desperately want.

According to a Public Agenda Research Study, 57% of Americans say that they would like to know the price of a medical service in advance, while 43% say they would choose a less expensive doctor if they knew the price. 

With a clear need for price transparency, why is it getting harder to find prices? Why do people have to wait until they get a bill months later and face sticker shock and despair, wondering how they’re going to make their payments?

I’m sure everyone has experienced first-hand the price discrepancies throughout the state. For example, an MRI can be $2,000 more in one city than another 50 miles away. At times, there are multiple different health systems in the same city, that drastically differ in cost for the same service or procedure, even if that service is a commodity like lab work or a drug.

Research from a 2015 Journal of the American Medical Association (JAMA) study indicated that from 2015 to 2020, as many as 20% of all US hospitals will seek a merger. You may have already started to see these mergers in your own area. The study also concluded that health system mergers were associated with price increases of 20% to 40% and that no study has found that a health system consolidation has directly led to lower prices. It seems clear that the point of health system mergers is not to drive lower costs for you. With higher costs and more power in the marketplace, health systems are less incentivized to offer the type of price transparency and cost consistency that so many of us want and need.

Health consumerism is necessary for affordable care now and in the future. Unlike more traditional markets, however, the healthcare industry is behind the times. I believe two things need to happen to catch up: health systems must be more transparent about pricing and patients must take an active role in seeking and demanding this information. If your doctor or hospital can’t provide you an estimated cost in a way simple enough to understand, the services provided may end up costlier than you expected or even needed. And instead of accepting medical services without explanation or question, let’s get involved. After all, it is your money, your body and your health at stake.

*References:

  1. https://jamanetwork.com/journals/jama/article-abstract/2429159?redirect=true
  2. https://www.compassphs.com/blog/10-exclusive-facts-on-hospital-consolidation/
  3. https://www.brookings.edu/testimonies/health-care-market-consolidations-impacts-on-costs-quality-and-access/
  4. https://www.publicagenda.org/pages/how-much-will-it-cost *

 

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