HFMA: Healthcare Pricing Transparency a Shared Responsibility

Christopher Cheney, for HealthLeaders Media , April 30, 2014

"Patients are assuming greater financial responsibility for their healthcare needs and in turn need information that will allow them to make informed healthcare decisions," the report states. "Price is not the only information needed to make these decisions, but it is an essential component."

'Unleash the Market'

One of the most powerful results of greater price transparency will be transforming many fields of medicine into market-driven service delivery models, according to the HFMA report.

"Certain areas of health care are becoming, or already are, more like a retail marketplace, including the market for elective procedures such as Lasik eye surgery or cosmetic surgery," the report states.

"Recent trends in consumer-driven and value-based insurance design are moving 'commodity services' such as lab work, imaging, and screening tests, as well as some procedures, more toward a retail model. And new payment models are potentially reshaping how care will be delivered and priced."

David Friend, who earned a graduate degree in finance from the University of Pennsylvania's Wharton School, a medical degree from the University of Connecticut and now works at accounting powerhouse BDO, has been advocating for market-based reforms in medicine for nearly four decades. In a phone interview he said price transparency and market-based reforms go hand-in-hand. "They're going to have to unleash the market."

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4 comments on "HFMA: Healthcare Pricing Transparency a Shared Responsibility"

Jack Durbin (4/30/2014 at 1:57 PM)
I would add to the information shared about pricing transparency the tension between services delivered at a hospital compared to a clinic or outpatient center. There are significant added costs to provide a 24/7 full service facility compared to a M/F day time service. Even for patients with insurance, increasing deductible costs are making patients select the point of care with the lowest cost as that is the usual basis for their out-of-pocket expense. What they don't realize is that in smaller communities, these choices may make the difference in the scope of services that the local hospital may continue to be able to offer.

Fritz Stephens-Tiley (4/30/2014 at 12:21 PM)
As usual this article has missed the boat. The notion of "price" transparency is irrelevant when you have providers setting their "prices" at, in most cases, over 200% of their costs. Cost data is freely available via CMS cost reports that hospitals are required to submit annually. The health care industry is a cash cow for those willing to exploit it. Insurance companies are no better when they consistently do a poor job of negotiating with providers for more realistic reimbursement rates. They simply pass any rate increases to their members in annual premium hikes. The "Free Market" has failed us.

Cody (4/30/2014 at 10:12 AM)
While pricing transparnecy is the responsiblity of the provider, once pricing is provided it's the responsibility of the patient to pay for their care. A lot of what is being missed in what is being described in most articles related to hospital pricing is the fact that a majority of patients don't meet their payment obligations. Thus the ever increasing amount of hospital bad debt and uncompensated care. In addition, not often mentioned is the self pay discounts, charity and other forms of discounts provided to patients. As with most people that have bought a car, you rarely pay the "sticker price".




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