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Get Ready for Price Transparency

Philip Betbeze, for HealthLeaders Media, November 30, 2012

Providers traditionally have funded money-losing programs, and even Medicare and Medicaid access, through margin on their commercial contracts. CPR Executive Director Suzanne Delbanco, PhD, says that as provider consolidation has continued, they have amassed more market power, and thus, there's less competition for their services to health plans and employers. As a result, prices may have increased exponentially to fund these money-losing services.

But that's only one scenario. Certainly, some providers out there charge prices that bear no relation to market reality. Whether the extra dollars are necessary to fund money-losing services that would otherwise be absent is a matter of how much and to what degree they do so. Determining how that equation is resolved is impossible without transparency.

Also, Delbanco says, in the past providers may have been afraid to show price information without also showing quality information, implying that higher cost begets better quality. With numerous quality rating systems now coming on line, providers may have an additional weapon to show that their prices are indeed based on higher quality. And if they're not, you, as a leader in your organization, may have some adjusting to do.

Catalyst for Payment Reform seems to have modeled itself in some ways on the strategy of the Leapfrog Group, which has a somewhat controversial record as a proponent—and arbitrator of—quality scoring for hospitals. It's also Delbanco's previous employer.

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2 comments on "Get Ready for Price Transparency"


Sara McFarland (12/3/2012 at 10:57 AM)
We agree wholeheartedly that transparency is necessary and it is not on the horizon anymore, it is already here. Patients need to know where they can go for transparency and get accurate pricing and quality grades, personalized to their needs. This is why we created our site, to remove the guess work and time wasted calling around to practices on the search for pricing. Additionally, even if a patient does get a quote over the phone, who is to say that is the price they will end up paying? We've removed that shadow of doubt with online payments and scheduling all online like Hotels.com. It's the future of health care and the bright side? Providers ARE buying into this. When they see the writing on the wall, they will fall in line because they will see that it is beneficial to them as well to be futuristic when it comes to their practice.

Dan Prince (11/30/2012 at 4:09 PM)
If we ever truly want "consumer-driven" healthcare, having transparent quality AND pricing information is imperative!