Imagine being a patient whose infusion therapy to treat Crohn’s disease cost $40,000, but who later found the same treatment for $4,000 at a treatment center a few miles down the road.
On top of that, the patient also gets paid $500 in shared savings cash every time he or she drives to the new location for treatment.
What seems too good to be true is now the reality for some public employees with medical price transparency. And it may become a common reality for almost everyone else, thanks to a new finalized federal rule released by the Centers for Medicare and Medicaid Services.
There’s bipartisan agreement that patients deserve genuine price transparency when it comes to the cost of medical procedures and health care services.
Eighty-two percent of voters said the issue was important to them and valued the idea of getting detailed cost information ahead of time. Seven out of 10 voters supported the idea of shared savings going to a patient when they choose high-value providers.
The Centers for Medicare and Medicaid Services last month took a huge step to increase price transparency for non-emergency services at many health care facilities.
When implemented, price transparency will help drive down prices, give patients relief, and enable them to be directly rewarded for comparison shopping.
In its new rule, the Centers for Medicare and Medicaid Services requires hospitals to make public the true price of services in a format that companies can use it to help consumers shop. That means websites and apps will be able to grab that information, and patients will just need to compare their options on their smartphones with their doctors.
It will be similar to consumer-friendly services already available for booking flights or buying a car.
This historic move will help patients get the information they need to make educated decisions and help them afford their treatments, whether it is a patient who needs a one-time procedure or someone with a chronic condition who interacts with the health system on a regular basis. It will save many families thousands of dollars.
Critics of the move worry about the “burden” that transparency and more competition will have on hospitals. However, they have a vested financial interest in maintaining the status quo; that is to say, in less transparency.
Isn’t it time patients get to see costs as they pick the right health care option with their provider?
State-led initiatives have proved it will work, and the federal agency’s action follows in successful footsteps at the state level to make medical costs more transparent. A reform known as “right to shop” has lowered prices in a number of states and helped patients in the process.
One company that provides medical pricing data to consumers has been highlighting the disparity in the price of a nuclear stress test, which helps providers detect poor blood flow or damage in one’s heart, since 2013. The result has been a steady decline in price—amounting to 28% over five years—at what was previously the highest-cost provider in New Hampshire.
Additionally, another New Hampshire-based transparency program for public employees that produced $36,000 in savings in the form of avoided spending for infusion therapy is now saving roughly $320 per member per year, with many more savings opportunities available for patients.
That program is just scratching the surface. Imagine what can happen when more patients join them in comparison shopping for care.
With state experiences in mind, over time, providing price transparency should be possible for nearly all medical services and by all providers and facilities.
There are more ways to encourage genuine price transparency in the health care system, and the Centers for Medicare and Medicaid Services and other federal agencies should continue to strive to do so.
This hospital rule and a proposed insurer rule—which would require insurers to provide patients with tools to shop and to disclose real prices—are some of the biggest positive steps in decades at the federal level.
For families making medical decisions and paying health care bills, those are steps in the right direction.