Americans often get tips about how to spot a selling scam: Deals that sound too good to be true; a free trial month that ends with impossible-to-get-rid-of regular charges; hidden fees buried in the fine print.
Unfortunately, too much of our health care system has long mimicked these unscrupulous tactics by keeping information — most importantly how much something is going to cost — from patients.
That’s changing, thanks to actions taken by the Trump administration to require health insurers and providers to give patients access to pricing information. The price transparency rules (the latest of which was just unveiled) would ensure that patients can find out how much they will have to pay out of pocket for any procedure, as well as how much the provider will charge their insurer, and how much it would cost if they were paying in cash.
Special interests, health providers, and insurers have largely fought to prevent price transparency because they prefer the opaque system when patients are kept in the dark — expected to show up, get whatever treatment is recommended, and just hope they won’t be hit with an unexpected, high bill later.
This lack of transparency helps fuel the rapid increase in health care costs (there’s really no reason to try to keep prices competitive if no one is paying attention) and create incredible disparities into how much procedures cost at different facilities. For example, according to the Health Cost Institute, “the median price of a vaginal delivery in Boston-Cambridge-Newton, MA-NH was $8,074 but ranged from $4,701 at the 10th percentile to $15,973 at the 90th percentile, a difference of $11,272.”
In fact, an analysis by economist Larry Van Horn at Vanderbilt University found that patients who pay cash for health care services pay 40 percent less, on average than the prices charged for insured patients. The cash-paying portion of the market for health care services is fairly small (compared to the portion of the market controlled by third-party payment), but price transparency rules would help all payers, and all patients, to shop around for services or simply plan for health care expenditures. Transparency would lead to greater competition and lower prices.
Defenders of the status quo tend to counter that someone can’t stop to check a price list when suffering a heart attack or a stroke, or right after a car crash. That’s certainly true, and everyone agrees that patients in need of immediate care should get whatever treatment is necessary and worry about costs later. Yet most health care decisions are not made in the middle of an emergency. More than 90 percent of health care spending is non-emergent, or on health care services that are shoppable.
Think about your own medical history and you’ll likely find that you planned the vast majority of your medical treatments, from your routine doctor’s visits, to where you gave birth, to where you get to follow up treatments for chronic health conditions. In all of those instances, you were shopping for a health care provider. You probably were able to find out if the doctor’s office took your insurance, but I bet it was often hard to get a good handle on what you might have to pay out of pocket, let alone what those procedures were costing your insurance company. That’s certainly been my experience in planning care for myself and my children. Instead, most people simply wait until we receive our Explanation of Benefits in the mail, long after the fact.
It shouldn’t have to be that way: There is no reason that we shouldn’t have been able to get a solid answer on how much consultation and treatment will cost — before receiving the care—so we can make informed decisions.
Some argue that health care is different: doctors can’t know exactly what they are going to find when they open you up for surgery. Undoubtedly that is true, though it applies to a very small fraction of situations. But even when there are unknowns, there is no reason that providers cannot provide estimates with different scenarios, like we receive from auto mechanics or electricians, so that we can still compare those prices against those of other providers, and have at least a ballpark so we can make a plan.
Nine out of ten Americans want access to this information. At a time when Americans seem divided on just about every issue or question you can come up with, there is near unanimity that people believe patients have the right to know the costs of procedures before they get treatment. Almost 90 percent of Republicans support this principle; so do more than 90 percent of Democrats. And a whopping 98 percent of women age 40 and under support it.
You might think that, with support like this, that price transparency requirements are inevitable, regardless of who wins the election. But that’s wrong. Unlike a statutory law passed by Congress, the rules that the Trump administration has put in place through executive order can easily be reversed. And there’s plenty of opposition to the requirements — not among the general public, but concentrated in the powerful hands of the health care lobby. That’s why Americans should encourage lawmakers to take action as soon as possible, including during the lame-duck session, to codify price transparency into law. Candidates can also show their commitment to the principle of price transparency by signing this Patient Protection Pledge.
Americans benefit from having businesses of all kinds compete for customers by providing good value at affordable rates. There is no reason health care should be any different.
Carrie Lukas is the vice president at Independent Women’s Voice.