The United States spends $3.6 trillion each year on healthcare. That’s an average of $11,000 per person, and the Centers for Medicare and Medicaid Services (CMS) projects spending will rise to $6.2 trillion, or about $18,000 per person, by 2028.
It’s no secret most U.S. consumers are frustrated with the high cost of healthcare. In addition to $500 for the average outpatient visit, most inpatient stays run more than $22,000, resulting in this nation spending almost twice as much as the average developed country. Hospitals are one of the worse culprits, with approximately 45 percent of all spending by health insurers going to these facilities.
Unlike many other services and products in the U.S., prices for healthcare often are not clear to consumers. While rules implemented under the Affordable Care Act (ACA) require hospitals to publish the standard dollar amount for the services they provide and prices have to be listed on hospitals’ websites in a machine-readable or computer-friendly format, much of the data is still too complex for patients to understand. More than 50 percent of Americans report trying to find out the price of healthcare before receiving it, but most of the prices do not take into consideration insurer-negotiated rates.
A key effort to address the high cost of healthcare for Americans has been promoting price transparency, the goal of which is to reduce healthcare costs and spur competition among providers by enabling patients to shop for healthcare services. Approximately 90 percent of U.S. residents believe the government should require hospitals and insurers to disclose prices. Without this transparency, patients can receive the same healthcare services but end up paying drastically different prices. Perhaps it’s for reasons like this that about 75 percent of patients would rather pay $50 out of pocket than not know the cost of a primary care visit, and almost half say having a clear estimate of financial responsibility will affect whether they see a certain provider.
A key advantage of price transparency in healthcare is reducing costs and increasing affordability for patients, but there are a multitude of others for both providers and patients, including the elimination of surprise medical bills causing great stress, more educated healthcare purchasing decisions leading to better outcomes, easier comparison of hospital products and services, and more profitable revenue collection. For providers, offering price transparency also promotes patient engagement, which the World Health Organization (WHO) defines as “the process of building the capacity of patients, families, careers, as well as health care providers, to facilitate and support the active involvement of patients in their own care, in order to enhance safety, quality and people-centeredness of healthcare service delivery.” Patients who are fully engaged in their care are also more likely to maintain treatment plans.
The primary initiative from the U.S. government designed to address this issue is the CMS Final Rule on Price Transparency, which is scheduled to go into effect on January 1, 2021. According to the Department of Health & Human Services (HHA), the final rule will require hospitals to make their standard charges public in two ways:
According to the rule, hospitals must list standard prices for 300 “shoppable services,” as well as the lowest prices they will accept from consumers paying out of pocket. Shoppable services are defined by CMS as those that can be scheduled by a healthcare consumer in advance. Hospitals and health systems that don’t comply with one or more of the rule’s requirements face a monetary penalty of up to $300 per day.
At Tripment, we believe that healthcare can be done better, and it starts with price transparency and healthcare consumerism. Contact us to learn more about the services we provide for both providers and patients.