Price transparency - a transformational trend in care delivery
Over the last decade the U.S. healthcare industry has undergone a significant shift — transforming to be more consumer centric— to deliver quality care at low costs. However, according to the Performance in an Era of Uncertainty - The 17th Annual Towers Watson/National Business Group on Health Employer Survey on Purchasing Value of Health Care shows that the healthcare spend is increasing at a fast pace year on year.
The variation in price of the same health services delivered by providers is one of the biggest factors for the rise in cost and in some cases this increase is by 2-5 times. This rise occurs due to lack of price transparency in the quality and the cost of healthcare services. Consumers should be able to understand their financial responsibility prior to availing healthcare services rather than after. This price transparency enables consumers to seek information they need to take sound healthcare decisions and make financially prudent choices.
In delivering transparent information to consumers to help them evaluate the value of their choices, healthcare price transparency solutions need to address the following key areas:
- Provide care estimate (out-of-pocket expense) prior to care delivery: Make consumers aware about the out-of-pocket costs and covered benefits. Use a treatment cost estimation tools to gauge relevant geographic pricing and integrate real-time benefits, such as deductible and out-of-pocket expenses.
- Structure health benefits in the interest of end customers: Incentives attract customers to select care plans, so a high-deductible plan or a customer-directed plan will work best. Facts say the majority of them simply will not bother about the insurance premiums charged by payers.
- Make pricing easy to understand: Providing simple and easy to understand pricing information helps in customer awareness about the benefits covered.
- Fair provider comparison: Helps consumers to make care decisions by giving fair comparison of services provided by different providers in their vicinity.
In response to support the implementation of Price Transparency, many states have passed price transparency legislation to guard the consumers from hidden variability in health care prices. Some of the clauses of this legislation include:
- Prohibition of gag clauses to avoid contract provisions that forbid the disclosure of pricing information
- Creation of APCDs (All-Payer Claims Database) for monitoring price variation
- Implementation of cost calculators by health plans in the state insurance marketplace
According to the recent release of The Catalyst for Payment Reform Report Card on state effort to revealing price information to consumers, only two states out of 50, received an A rating. Five other states earned a B, 14 others took home a C or D, while 29 states received an F, meaning these states have no transparency law.
As the goal of price transparency, making available the critical information to consumers on the price and quality of care is a requisite. To recognize the true potential of price transparency it is important to emphasize the accessibility and usefulness of price information. We, at Syntel recommend the use of a comprehensive healthcare price transparency solution that incorporates various customer facing tools to support consumers value-based healthcare decisions:
- Price and quality comparison
- Provider search and referrals
- Treatment cost calculator
- Patient reviews and ratings
- Cost savings and discount alerts
- Online consultation
Additionally, we also have solutions for member incentive programs with an ability to integrate with other products (e.g. health plan benefit information, claims details, etc.)
Guninder Bhatia carries over 9 years of rich domain experience in Healthcare industry and also being part of Agile CoE provides agile consulting and Domain specific solutions across global clients. She has been involved in CoE Consulting processes, creating business solutions and developing new innovating offerings.