Cost Transparency in Healthcare
Jo Cavender from the Speakers on Healthcare speakers bureau just sent a note and asked a question about “cost transparency” in health care.
Jo…Cost transparency is both a big topic and a core problem in HC. It is one I have a very strong personal POV on. I’ll briefly give you what I feel is the core message for patients/insureds and providers.
American consumers have almost no understanding of what “healthcare costs”. Unlike other major expenditure’s in their lives where they comparison shop to the dollar, (think auto, air ticket, appliances, hotels, rent, contractor bids, etc.), most consumers, until recently, never or rarely asked what a therapy, new drug, another test, 10 sessions with a PT, an extra night in the hospital, etc., will actually cost. Historically co-pays have been so low for the well-insured they haven’t asked and still don’t to this day. Providers? Well let’s just say they tend not to offer.
This has begun to change over the last number of years. Fewer consumers are “well-insured”. The biggest change has come from the millions of self-employed who now purchase high premium/high deductible individual insurance. They’ve had an awakening — all it takes is that first trip to an ER, that first question to your MD about “generic vs brand”, that first decision about whether to do the MRI or settle for the X-Ray, etc. — as they often pay the first $5k of cost, this consumer has started asking questions.
Healthcare providers are quite unprepared for it, but millions of the “new” consumers I refer to are going to be asking about prices, looking for second opinions, questioning care plans, insisting on the generics, etc. They are even looking for prices to compare procedures internationally (medical tourism). It is absolutely critical that this new consciousness regarding HC costs emerge from how we implement HC reform or we will have achieved very little. I think for millions of consumers who have been shielded from cost consciousness, this is about to change, they are about to “get smart” about HC shopping. All they have to do is ask their self-employed neighbor with individual insurance how it’s done.
Many think that better information on quality and cost (transparency) will be enough along with HSA’s, pay for performance, technology, etc. to motivate this consumer evolution– I think it will still require the act of pulling money out of their billfolds to bring about this change. Now if we can just get physicians and hospitals to join the parade….??? Bruce Clark