Three States Where Transparent Healthcare Pricing Caught On Early

By PokitDok Team,

American physician, Dr. David Belk, is blunt in his criticisms of how healthcare pricing has long been opaque in this country.

In a HuffPost piece titled “Your Money or Your Life,” Belk, a doctor of internal medicine in California, introduces readers to Ann Marie O'Callaghan, a mother of two, who was diagnosed with breast cancer in 2012. Doctors were initially able to treat Ann Marie’s cancer, and she went into remission until the summer of 2015. Then, when Ann Marie’s insurance refused to pay for a specific treatment, she was the one left holding the bill.

This brought the kind of sticker shock only found in American healthcare. It was at this moment she learned that the treatment, which would have cost her insurance company only about $12,000, was going to cost her more than $60,000.

“Hospitals and other healthcare providers routinely give insurance companies 70–80% discounts off the billed charges for medical services,” Dr. Belk writes. “But if you have insurance, and your insurance company denies a claim for any reason, hospitals insist that they are obligated to bill you the full amount for that service.

Fortunately, this is all changing — and here’s the why and where of the story.

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The Business Case for Price Transparency

Journalist Beth Kutscher spoke with industry executives around the topic of price transparency and reported her findings in a piece for Modern Healthcare. Many executives agreed that price transparency was a good way to engage patients. Some saw price comparison and online scheduling merely as a patient service, but others saw it as a competitive advantage.

Kutscher highlighted MetroHealth System in Cleveland as one example of the latter. It publishes prices for common services, links to cost estimation tools, and even holds patient focus groups to make bills easier to understand.

PokitDok is working to take these steps even further. Transparency is built into the very core of our platform. Our provider search API lets patients search through one of the biggest provider directories available to identify who can provide them with the best care options. Our scheduling API makes it easy and seamless for patients to digitally schedule appointments with their providers - rather than the laborious and inconvenient process that comes with office phone calls and ever changing schedules.

When these APIs work in unison - among others including real-time eligibility and even our payment solutions, a clinic or healthcare system can dramatically reduce overhead costs, improve efficiency across processes, and clarify the cost of doing business. This makes it easy to translate business costs into a reliable, transparent price for healthcare provision.

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Three States Promoting Price Transparency

In another Modern Healthcare article, Kutscher reported on the Catalyst for Payment Reform and the Health Care Incentives Improvement Institute’s survey of state laws regarding price transparency. Forty-five states received a failing grade on that report card.

“Still, momentum is building around price transparency, particularly as more people shoulder greater responsibility for co-pays and deductibles,” she writes. “States like Connecticut and New York are working on consumer-facing websites, and Maryland and Washington are similarly pushing forward on transparency initiatives.”

Below are three states that have either lawmakers or non-government organizations (NGOs) that deserve praise for pushing for price transparency in their local healthcare systems.

 

Minnesota

“Minnesota was the first state in the nation to release comparable information on patients’ total cost of care by medical group,” MN Community Measurement writes. That group’s website, MNHealthScores.org, allows patients to compare prices by medical group.

That said, this work has largely been done by NGOs, who are still having to put pressure on state lawmakers to pass legislation.

 

California

California passed its Hospital Fair Pricing Act a decade ago to protect even uninsured patients from the inflated prices hospital systems often offer, noted Stephanie O’Neill, health correspondent for Southern California Public Radio. That law requires hospitals to offer “significant discounts” to patients with insufficient insurance or without any insurance at all, provided they don’t make more than $40,000 per year or more than $80,000 for a family of four. The discounts would also apply to anyone, regardless of income, if medical bills account for more than 10% of their annual earnings.

 

New Hampshire

New Hampshire is the only state that received an A on the aforementioned report card thanks to initiatives such as the NH Health Cost government website.

“[New Hampshire’s] experience suggests that publishing payment rates can have an impact on negotiations between insurers and providers,” Kutscher wrote. “The initiative also has encouraged new health plan benefit designs that are sending consumers to lower-cost care settings and prompted hospitals to offer patients lower-cost care settings.”

As heartening as those achievements are, our industry must continue promoting transparent pricing and educating people to be wise consumers of healthcare. This goes well beyond state-level legislation. The true driver of change will be when healthcare providers learn — via the adoption of disruptive technology — that transparent pricing should be an industry best practice.

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The opinions expressed in this blog are of the authors and not of PokitDok's. The posts on this blog are for information only, and are not intended to substitute for a doctor-patient or other healthcare professional-patient relationship nor do they constitute medical or healthcare advice.

  Tags: Health Innovation, Healthcare consumerism

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