For decades, the U.S. healthcare system appeared to run smoothly. Consumers gave little thought to the cost of a medical procedure since, in large part, they didn’t have to pay for it. They paid their deductable (often low) and they paid their co-pay (often small). In fact, when a consumer/patient asked his or her doctor how much a procedure might cost, the doctor often answered with “your insurance will cover it” and not with the actual cost for the procedure. Moreover, the cost of healthcare insurance was largely covered by an employer and/or buried in a payroll deduction.
The actual cost of healthcare thus fell largely on the healthcare insurance companies or payers, who negotiated rates and discounts and then passed on the resulting costs to their clients (corporations) and their employees. Over time, with hardly any transparency, the actual cost for healthcare escalated to almost 20 percent of the U.S. GDP. The growth was not sustainable.
There has been much debate over the resulting government response to the skyrocketing costs of healthcare. But one thing is clear: There must be more transparency in order to (a) make consumers more accountable for the cost of their health, and (b) to enable consumers to make “free market” decisions on where to get their healthcare based on costs, quality, and outcomes. There is no easy solution for overcoming this lack of transparency challenge, but here are three areas where we can start on the path to achieving transparency:
- Make “out-of-pocket” and “negotiated prices” available to all. (Cost Transparency). Just as the “dealer cost” and “sticker price” for a new car is readily available, consumers need access to the true cost of a procedure to make an informed decision, including comparison shopping between providers.
- Publish quality metrics for providers. (Quality Transparency). Provider quality (outcomes) should be measured by a standardized set of measurements (not social media opinions), making it easier for consumers to understand the quality of the care they are selecting.
- Payers should offer “deductible waivers” or rebates to consumers who take prescriptions, follow regimens, and achieve quality outcomes. (Outcome Transparency). Consumers should be accountable for their outcomes. They need to agree to be measured on and/or be rewarded for their health results.
Note: Some payers are making progress in providing more information, including Health Care Service Corporation, which offers a “Provider Finder” tool to help members research and select physicians and hospitals as well as estimate out-of-pocket healthcare costs. The out-of-pocket estimates are based on a member's health plan benefits including health reimbursement and health savings account balances. The tool also includes patient reviews of physicians and facilities.
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