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Is it time for price transparency in healthcare?

Rising healthcare costs continue to plague our community and our country despite decades of talk from politicians, experts, and industry leaders. With the prospect of large-scale action at the federal level increasingly dim, my thoughts have turned to what consumers and decision-makers can do to make a difference. I think embracing price transparency is our best option.

Health economists and others have been calling for increased transparency in the cost of healthcare services for decades. But you don’t need a PhD to understand that it’s nearly impossible to stick to a budget unless you know how much your options will cost. Can you imagine shopping at a store that doesn’t show you any prices and expects you to pay the bill the following month? I don’t think anyone would choose to shop there, but when it comes to healthcare you don’t have any other choice.

In fairness to our friends in the healthcare industry, providers have some valid reasons for keeping their prices hidden. For the commercial market, providers negotiate their rates with insurers and networks, so the first to voluntarily disclose their prices will be at a disadvantage relative to their competitors. What’s more, pricing healthcare is no simple task. Health systems must account for a wide range of factors including the share of services delivered to Medicare and Medicaid patients, charity care, and nonpayment.

That said, none of these rationalizations for the status quo should stop the rest of us from doing our best to consider our costs before we receive healthcare services. This can be as easy as visiting the type of facility that is most appropriate for the type of care you think you need. For example, an emergency visit for a non-life threatening condition will be much more expensive than a trip to urgent care or a convenient care clinic. Telemedicine options are often even more affordable.

Beyond that, patients should know that there many resources available to help them make informed purchasing decisions. A number of organizations offer online tools that give pricing data for different types of services. To my knowledge none are currently able to give exact prices for individual providers and services. Nonetheless, these transparency tools can help patients evaluate whether their doctor’s price is out of line with the market.

If your company’s insurance broker or consultant offers Zywave’s HRconnection, your employees can use the Amino feature to look up these types of cost estimates. My firm, mueller QAAS, also offers our clients a curated list of efficiency and quality information on area specialists that we obtained from the Wisconsin Health Information Organization (WHIO). Choosing a high-quality, efficient provider can reduce your costs because they are more likely to get it right the first time.

Taken in isolation, none of these tools will solve the problem of rising healthcare costs. But together, they can help empower patients to make informed choices and drive conversations with their healthcare providers.

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Jim is the founder, President, and CEO of Mueller QAAS, LLC, an independent healthcare consulting firm located in Waukesha, Wisconsin. Jim provides leadership and strategic direction to Mueller QAAS, and also provides his clients with objective market insight on their employee benefit decisions.

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