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In today’s fast-paced corporate landscape, business leaders navigate a delicate balance between the long-term need to protect the planet and the short-term need to stay economically viable.
On the global stage, climate change is one of the most pressing challenges of our time, and businesses across all sectors are transforming their business models to create a sustainable future that protects the triple bottom line – people, the planet, and profits.
Yet, as we delve deeper into this realm, one question emerges: does corporate sustainability and a commitment to a net-zero economy remain exclusive to those with the financial means to afford it?
Higher energy prices, supply chain disruptions, increased interest rates, geopolitical instability, and slow economic growth make it more difficult for businesses to invest in sustainability.
Some argue that corporate social responsibility is a luxury that only affluent companies can afford. Others believe that corporate accountability is essential for all businesses, regardless of size or industry.
What remains undebatable, however, is the imperativeness for businesses to seek pathways toward sustainability, even if it entails certain short-term sacrifices.
In this article, we’ll explore the multifaceted aspect of corporate sustainability and examine the opportunities for leaders to start building and scaling the future.
What is Price Transparency in Healthcare?
Price transparency in healthcare refers to the availability of information about the exact cost of items and services before getting them, allowing better understanding, comparison, and selection.
Access to prices allows patients to compare the costs between different healthcare services and providers. This kind of price comparison helps reduce excessive spending.
Additionally, greater transparency empowers the payers of healthcare services, such as insurers and employers, to minimize their healthcare spending. In turn, it increases providers’ competition based on the care’s value and not on the market share.
1) Payer Price Transparency
Payers in the healthcare industry include organizations such as health plan providers, health insurance brokers, Medicare, and Medicaid. They are the ones who negotiate or set rates for health care services, collect payments, and handle claims. As such, they play an essential role in improving payer price transparency.
For instance, insurers can work with providers to establish transparent payment systems. Allowing both parties to understand the cost more accurately, enabling them to negotiate better rates and create more competitive environments for patients seeking care.
Additionally, insurers may also provide customer service resources, such as online portals, which allow customers to compare the costs of different treatments or providers before deciding on their care.
2) Hospital Price Transparency
Furthering hospital price transparency could offer numerous benefits for healthcare consumers, insurers, and providers.
It would create greater competition among providers, lowering treatment and procedure prices. However, it would still allow them to maintain healthy profit margins and provide quality care at a reasonable rate.
Furthermore, it may reduce the administrative burden typically associated with billing processes. Since the pricing information will be known beforehand, all costs can be put on one bill.
Why Is Price Transparency Important in Healthcare?
Price transparency in healthcare allows patients to have clear pricing information and effectively handle their healthcare costs, preventing surprise medical bills. It also promotes better responsibility among healthcare providers by mandating fair and competitive service prices.
According to a recent survey by Affordable Health Insurance, 56% of US adults have medical debt, and one in four owes more than $10,000.
The US healthcare system doesn’t support financial planning regarding healthcare costs. In fact, an AmeriSpeak survey found that more than half of Americans (57%) have received an unexpected medical bill they thought was covered by insurance.
However, greater price transparency in healthcare can significantly improve this issue. It empowers patients to make more informed decisions and avoid taking out loans to cover their medical treatments and procedures.
This information can increase the probability that patients will seek care when needed rather than delay it because they are concerned about the expense.
Additionally, it develops trust between a patient and their provider, raising their loyalty and satisfaction. An InstaMed study found that 65% of people would think about switching healthcare providers if another one made their payment experience better.
Nevertheless, price transparency doesn’t only benefit consumers.
Since patients will understand their financial responsibility beforehand, it increases the likelihood of on-time payments.
If providers took advantage of this, combining it with price transparency solutions, they could experience timely and consistent cash flow. This will reduce their administrative costs since collections will take less time to complete.
Finally, price transparency makes it easier for companies to support their employees’ health by enabling them to provide better health insurance plans and healthcare advocacy solutions.
Benefits of Price Transparency in Healthcare
The benefits of price transparency in healthcare go beyond better understanding, comparison, and selection of medical services or items. They regulate costs, empower patients, and improve the overall quality of care.
- Empowering Patients
A Health Care Cost Institute study reveals that seven out of ten patients want to know the expense of their medical procedure before undergoing it since this allows them to weigh the financial implications against the potential benefits.
Understanding the cost empowers patients to select the most suitable care options that align with their budget and healthcare needs.
As a result, they become active participants in their healthcare journey, leading to improved outcomes and increased satisfaction.
- Reducing Healthcare Costs
Price transparency offers a key benefit in controlling the rising costs of healthcare. Patients with access to information can make informed decisions about their care, choosing cost-effective treatments and procedures.
This approach also reduces unnecessary medical interventions and tests, as patients and providers work together to select only the necessary services.
- Encouraging Healthy Competition
The healthcare industry is already highly competitive. However, transparency in costs introduces patient-centric elements in the competition. This drives providers to deliver higher-value care, an aspect consumers favor since data indicates that 80% will choose the provider that offers the highest value.
Ultimately, this benefits patients by providing better care at more reasonable costs.
The Challenges of Price Transparency in Healthcare
Industry experts and stakeholders have widely discussed the challenges of price transparency in healthcare.
Despite the potential benefits, providers and insurers may be reluctant to disclose their prices publicly out of fear they might compromise their profits. Without the ability to keep costs private, they may feel they cannot compete effectively with each other.
Additionally, some providers may fear being unfairly judged based solely on pricing information without considering factors such as expertise level or quality of care offered.
Making accurate pricing information available can create additional administrative burdens for both payers and providers. They will have to review claims processing procedures and update billing systems accordingly, all while ensuring that patients receive appropriate levels of care within budget constraints imposed by insurance companies.
This can prove incredibly challenging in states where medical services are not subject to standardization across different facilities. Hence, as a result, it will create disparate costs from one provider or facility to another.
A report by KFF analyzing data shared by hospitals further reveals issues with its usability.
- Unclear specification of what services prices correspond with; for example, sometimes prices for a group of treatments might be for just one day.
- Inconsistent data with low or high rates that are questionable.
- Lacking essential details like how the costs are decided or what the contracting methods are.
- These challenges stem from inadequate standardization and specification in reporting requirements, impacting data reliability.
Finally, issues regarding privacy could arise when it comes to collecting and sharing personal health data. This kind of data is necessary to estimate any procedure’s cost and ensure better outcomes accurately. However, without proper security measures, if someone’s sensitive information were made accessible online, they could be victims of identity theft or fraud abuse.
Price Transparency in Healthcare Pros & Cons
Price transparency in healthcare has become an increasingly important topic, as it can significantly affect the cost of medical services.
The benefits of healthcare price transparency are significant, but it doesn’t come without shortcomings.
So, what are price transparency in healthcare pros and cons?
Pros | Cons |
Allows consumers to make more informed choices | Puts pressure on wages and salaries for hospital employees |
Improves patients’ experience and satisfaction | Impacts the availability of under and uncompensated care |
Creates healthy competitiveness among providers | Puts health systems with fixed costs at a disadvantage |
Gives patients more choices when selecting where to receive treatment | Could drive up prices due to reduced demand and lack of payers’ negotiating power |
Builds trust with consumers | Risks exposing sensitive information regarding negotiated rates between different parties |
Enhances the quality of care | The provided information might be inaccurate |
Leads to lower and more uniform prices | Consumers might have difficulty understanding the pricing details |
Healthcare Cost Transparency Laws & Regulations
Costs and transparency in healthcare are significant concerns for Americans. Data from the Change Healthcare study shows that 53% of US consumers avoided getting help because they weren’t sure of how much it would cost them. Additionally, 59% have gone to an appointment without knowing whether they could afford it beforehand.
Therefore, to make cost information more accessible for consumers, The Centers for Medicare & Medicaid Services (CMS) put forth two price transparency healthcare policies.
1) Hospital Price Transparency Rule
The Hospital Price Transparency Rule lets Americans know how much a healthcare service costs before receiving it. According to the law, starting January 1, 2021, all US hospitals must provide clear and accessible information online about their offerings in two ways:
- As a meticulous machine-readable file containing all products and services.
- A consumer-friendly format of “shoppable” services published online. Access to the information must be public and not require log in or personal health information (PHI).
Hospitals must comply with the rules. Otherwise, they may face monetary penalties for noncompliance.
2) Price Transparency Healthcare Policy
The Transparency in Coverage Final Rule, published in October 2020, mandates that health plans and self-insured businesses provide customers and stakeholders comprehensive price and cost-sharing information. This price transparency healthcare policy adopts the following strategies to increase access to pricing information, which must be put into practice by three deadlines:
- By January 1, 2022, they must publish three publicly accessible, machine-readable files, updated monthly, covering historical out-of-network permitted amounts, prescription pricing, and in-network provider-negotiated rates.
- By January 1, 2023, they must give members access to an online self-service tool with specialized search capabilities that displays costs and cost-sharing details (such as deductibles) for 500 shoppable services that CMS specifies.
- By January 1, 2024, they must provide pricing and cost-sharing details for all goods and services using the same online interface.
3) Healthcare Transparency Act 2022
The Healthcare Transparency Act 2022 is a landmark piece of legislation that seeks to increase transparency and accountability in the healthcare industry.
Since 2019, the American government has implemented several legislations under the act that will improve price transparency. These include the Hospital Price Transparency Rule, the Transparency in Coverage Final Rule, and the No Surprises Act.
The Hospital Price Transparency Rule requires all hospitals, clinics, and other medical providers to disclose their pricing information for services publicly, giving patients more control over the cost of their care.
Additionally, the Transparency in Coverage Final Rule mandates that insurance companies provide detailed explanations about what is covered under each policy and how much out-of-pocket costs could be incurred for any procedure or treatment.
Finally, the No Surprises Act protects consumers against surprise billing when receiving treatments. Under this new rule, hospitals must include all potential charges associated with any procedure upfront. Hence, this protects customers from additional fees added after service has already been administered without them knowing beforehand.
Empowering Patient Choice with Price Transparency Tools
Most responders (81%) in the Change Healthcare study say that “shopping for healthcare should be as easy as shopping for other common services,” and 76% wish there was a “single place they could shop for and purchase healthcare.”
Luckily, with the new rules in place and technology playing a significant role, providers and insurers are developing tools that enable consumers to do that.
This new software is specifically designed to help consumers quickly access up-to-date pricing information from different providers. They typically allow users to view all relevant details regarding services offered before booking appointments.
In addition, they also let consumers compare prices side-by-side, thus enabling them to find the best deals when selecting healthcare services while ensuring they receive appropriate levels of care.
Conclusion
With a drop in life expectancy and the U.S. healthcare system still being the most expensive among other high-income countries, price transparency in healthcare emerges as a solution to improve affordability and access to medical services.
Between an expansion in digitalization and all the regulations in place, consumers can confidently select the best services available within their budgets while receiving high levels of quality care.
Although not without challenges, this can pave the way for a more efficient and patient-centric healthcare system. However, the progress should reflect on the delicate dynamics between payers and providers and balance providing pricing information while safeguarding sensitive data.
Written by Tamara Jovanovska
Content Writer at Shortlister
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