Should hospitals and other healthcare providers publicly disclose the secretly negotiated prices they charge insurance companies for their services? Today’s complex arrangements, hidden charges, and lack of transparency make it hard to tell which hospitals and doctors are driving costs higher. Insurers and hospitals routinely enter into confidentiality agreements that make it possible for the hospitals to hide prices from consumers, add fees and discourage the use of less-expensive rivals.
The U.S. Department of Health and Human Services is inviting comments on a proposal that would require providers to release the actual cost of care for the first time. The comment period closes May 3, 2019.
Some healthcare experts argue that pricing secrecy is one reason why the U.S. spends more per citizen on healthcare than any other developed nation. According to the Kaiser Family Foundation, even though the U.S. spends about 100% more on healthcare than comparable developed countries, it has 15% greater mortality than those countries.
Transparency and openness is commonplace in many other industries and has fueled innovation, growth, and competition; but the healthcare industry has resisted public exposure of fees because it would upset their control of price negotiations. If negotiated rates become public, it will bring about a sea change in the way healthcare is priced and purchased in the U.S. Providers could lower their prices to attract patients. Insurers could demand greater discounts. Employers could press their insurers to include hospitals with lower negotiated rates in their networks. Patients would benefit from being knowledgeable consumers.
Under the current system, people have shown limited inclination to shop for healthcare services, even when they face higher costs. This is due in part to the unfathomable healthcare pricing system and lack of comparative data. With clear cost and quality comparisons of all available services, consumers might change their habits. Providers might become more competitive, and consumers could be empowered to shop for their healthcare and make health-related decisions much like they do when shopping for other consumer goods and services. Just imagine what it would be like if you could shop for cataract surgery on Amazon!