Bridging to Better Population Health - Concord eBook

The Promise of Price Transparency

Hope is on the horizon Payers and providers working together is the only way to improve price transparency to enable patients to choose high-value options. While a collaborative arrangement doesn’t exist quite yet, we are trending in the right direction. Personalized health plans and digital technology provides new opportunities to improve price transparency and illustrate a stronger correlation between cost and value.

In theory, price transparency offers clear benefits to both the patient and the healthcare system. Wouldn't people make more informed decisions if they understood the cost of care and the price variations between providers and care settings?

Unfortunately, price transparency in healthcare is complicated, misunderstood, and has a long way to go. Here are a couple reasons why:

Varying levels of insurance coverage. Insured individuals rarely pay the total price for their care. Instead, they pay a copay or a smaller amount dictated by their coinsurance or deductible. Consequently, the cost of care will dier from person to person. Payers have made recent strides to enable price transparency—but, in general, it’s still too diicult for someone to know their exact cost of care in advance. Further, understanding the insurance reimbursement and out of pocket cost calculations is convoluted and time-consuming.

Extreme price variation and misperceptions about value.

At a fundamental level, people are largely unaware that prices can vary so much in healthcare for the same service—and why that’s the case. Unlike other consumer goods, high prices in healthcare often don’t indicate better quality. A high price for a surgery, for example, may indicate poor provider outcomes/eiciency or that the care setting isn’t optimal. When people are cognizant of costs before their appointment and understand the reasons for price variations, they will likely choose higher-value care.

The percentage of patients that say a clear estimate of financial responsibility aects if they'll see a certain provider. 1