Health Insurance Pricing Transparency Could Save $36B Annually

John Commins, for HealthLeaders Media , February 29, 2012

The study identified site of service as another major driver of price variation. The costs of services done in hospitals are significantly higher than in the outpatient or office setting, and the study found nothing to indicated that higher prices correlated with higher quality of care.

Fabius says health insurance plans and providers need to drop their longstanding reluctance to hide their prices from the public.

"Getting that cultural change to occur will be a challenge," he says. "There is some good reasoning behind the interest on the part of providers and payers to negotiate privately. They believe their pricing schedule at least on the payer side may provide some competitive advantage."

"Ultimately marketplaces should be responding to the needs of the purchaser. The wind is in the sails for change and ultimately it will become clear to both the providers and the payers that in order to serve the needs of their ultimate customers, the purchasers and the consumers, they need to support greater transparency."

If consumers are expected to pick up more of the cost for their own healthcare, Fabius says simple fairness demands that consumers know those costs. 

"There is the hope that because the consumer or patient has more ‘skin in the game' they may be more inclined to engage in comparative shopping," he says. "What is concerning is that without adequate price or quality transparency it is very difficult to shop even if you have skin in the game."

John Commins is a senior editor with HealthLeaders Media.

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