Why Is Healthcare Price Transparency So Hard?
"I don't really see much leadership from payers on this," Keller says. "We continually show them we are a good value for their constituents, but they're a little cautious about going down that road because we are single-specialty and they don't want to harm their relationships with some of the other full-service hospitals in the area by directing patients to one facility or the other."
She says that as more and more healthcare dollars get pushed onto the consumer to pay, movement on this front might come more quickly.
"We have health savings accounts and a high deductible in our current healthcare plan," Keller says. "More of our employees are aware of the value that's coming out of their pocket before their health insurance kicks in."
Blame insurers, lax employers?
There are differing opinions about price transparency. Some believe that due to the complexity of contracts, cross-subsidization, and the nature of business negotiation, the links aren't always clear and, indeed, that it would be impossible to make them clear.
"What's holding it back is the fact that it's hard to be transparent when there are so many different reimbursement methodologies," says Peter S. Fine, the president and CEO of Banner Health in Phoenix, who says the very purpose of Banner is to be a vehicle to reduce healthcare overhead. It operates or owns 24 hospitals in seven states.
"You can produce charges, but there are so many different contracts and relationships, it's hard to say, 'Here's the price you should pay for something.' In a different environment, where there weren't so many different contractual relationships, it might be possible."
Fine argues that because everything is driven by a contract that results from an organization-to-organization negotiation, price transparency is nearly impossible to achieve and not worth much even if it is.
"So much more of this is driven by the insurer than the healthcare organization," he says. "The kind of transparency you're looking for doesn't typically happen in our world because of decades of development of relationships with the employers through whoever they've chosen to be their insurer or through various relationships through federal programs; you have vast differences on what people or insurers or the government pays or doesn't pay."
Instead of pushing for price transparency, Fine argues the biggest achievements that can be made in reducing the cost of healthcare—or at least the growth in costs—are not only through consolidation and elimination of overhead, but also through focusing on healthcare costs after about age 58.
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