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Why price transparency matters for health care

by Loren Bonner, DOTmed News Online Editor | May 20, 2014

Is there an example of a health care organization that has begun to make this information available?

WH: Several organizations have made significant strides into providing their patients and members with transparency. The large payors have the most incentive and therefore tend to lead the way, for example, Kaiser, Cigna, Aetna, UnitedHealth, and Humana. Payors are in the best position to calculate an estimate as they have the most data on the patient, the provider contract, the insurance policy, and the aggregate data for an average cost of a procedure.

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Providers are not as incentivized to disclose costs upfront (similar to how fast food restaurants were not incentivized to provide calorie counts on menus); however, patients will increasingly demand this type of information prior to office visits and procedures.

One important note, that is: even when this service is provided, consumers will need to be educated on how to leverage the information — adoption of existing tools has been extremely limited among membership with access to these services. This may be due to the lack of guarantee associated with the estimates, the difficulty in using the tools, or simply member avoidance given the personal nature of the transaction.

DMN: Anything else you'd like to add on the topic?

WH: There are many facets of the health care system that need reform. Price transparency is certainly a critical piece, but along with it several other aspects of the care continuum must change: quality transparency, reduction of fraud, waste and abuse, an evolution of the provider payment model, and consumers taking ownership of their health and treatment choices to name a few.

Transparency will usher in a new phase of care where consumers can have the right information to make these difficult decisions and understand the financial impact of their treatment plan — we can only hope this comes sooner rather than later.

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