Payers, providers win latest battle in ongoing hospital pricing war
Monday, November 11, 2019
It appears that hospital price transparency proponents have lost a recent battle. Trump administration officials are kicking a political can down the road after push back from hospitals and insurers, who would have had to make previously undisclosed rates public.
The Centers for Medicare and Medicaid Services (CMS) said it has some 1,400 comments for a proposed rule about the revealing of rates, and the coming rule regarding the topic will include responses to these concerns.
So, who wins here? Payers and providers, apparently. Consumers? Not so much. They remain out in the cold regarding the details included in prices and how those prices ultimately may affect them and their wallets.
Healthcare insiders have long argued against transparency so they wouldn’t be forced to reveal their negotiated rates with anyone outside their systems. These opponents of the regulation said competition could be at stake and that transparent pricing actually could be a harm to patients.
Some legal elites remain skeptical that CMS has the authority to mandate that hospitals disclose pricing information that makes up contracts with insurance plans. Insurance lobbyists say price transparency will lead to higher prices across the board.
Hypothetically, after seeing rates in a region, the lowest-paid hospital would demand higher prices, essentially creating a floor for pricing. “The hospital lobby has said it would fuel anti-competitive behavior among payers and threaten access to care,” Healthcare Dive reports.
A recent study claims that patients are taking steps to diagnose the price of their procedures through some old-fashioned internet research.
A survey from TransUnion Healthcare included responses from 2,500 patients that visited a hospital, clinic, or doctor's office within the past six months. It found that 75% of patients attempt to research the cost of medical procedures online, consulting health systems and health insurance websites to gain insights into their out-of-pocket financial responsibility before heading to the doctor.
Based on these figures, it’s hard to understand how more transparency is a problem for patients, who seem actively engaged in wanting to know more about the costs of their procedures.
According to the survey, the opposite seems true. Sixty-two percent of patients said knowing their out-of-pocket costs influences whether or not they can access healthcare. Forty-nine percent reported having a precise estimate of financial responsibility impacts whether they visit a specific provider.
If this is true, the survey strongly suggests that more pricing transparency in healthcare would hurt providers and payers more than patients.
Trump’s proposal first was offered in July. The first proposed rule from CMS called for hospitals to disclose “payer-specific” negotiated rates for at least 300 “shoppable services.”
For those lobbying arms that hope this move is a long-term victory, it’s likely not. Signs suggest that as younger generations require healthcare services, they’re going to want pricing information to support their decision-making.
Younger generations are more likely to use the internet to understand their out-of-pocket financial responsibility. Eighty-five percent and 84% of Gen Z and millennial patients, respectively, said they research their cost burden before visiting the doctor. Between 60% and 65% said those out-of-pocket costs can sway whether they visit the doctor or hospital, Patient Engagement HIT reports.
Another important point on the subject: As patient financial responsibility grows, more patients are responsible for between $500 and $1,000 in out-of-pocket costs, rising from 34% to 59%. It would be no surprise if consumers pushed to know how much money they are required to front for their health services.
“Only half of patients said they could access clear price transparency information, meaning only half of the patients know how much they will owe before accessing healthcare,” the study notes. Short-sightedness on price transparency is likely a failure to prepare for more consumerism, and further push back from those ultimately paying the bill.
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