As President Biden and his administration shape healthcare strategy for the years to come, it’s important to note that President Trump did sneak in one major piece of healthcare legislation right before the end of their term – one that is in line with the idea of encouraging transparency when it comes to quality care. Interestingly, with the Affordable Care Act still standing, Trump’s Executive Order On Price Transparency requires that almost all health insurers – including self-insured plans – disclose pricing and cost sharing information to consumers. Both individual and group employer-based health plans fall under this rule. Once fully implemented, this rule will (in theory) make it easier for consumers to understand the price of the care they receive. The total price, the negotiated price, and the in-network price for services will be readily available for consumers to help them plan and budget for their care in advance – rather than continuing to operate in our current murky system where prices are virtually impossible to understand and surprise bills, out-of-network costs, and overpayment are real problems for consumers. Is this the silver bullet we’ve been looking for to reduce healthcare costs in America? The answer is no, but it’s a good step in the right direction.
What does this mean for employers?
For those employers who currently offer their employees a plan that is fully-insured – meaning the insurance company takes on all of the risk and plan administration – there are not many changes to the way they currently do business. Their employees and other enrolled family members will, however, need to understand how to use these tools and the way they impact their health & healthcare experience. Employers will need to effectively communicate with their employees about the benefits of using transparency tools and encourage employees to do so whenever possible.
But making tools available to employees doesn’t always translate to adoption and utilization. And one key to reducing healthcare costs is consumer adoption of tools that help them take shop for their care. Communication and concierge services will be vitally important in helping with consumer adoption.
"Employers will need to effectively communicate with their employees about the benefits of using transparency tools and encourage employees to do so whenever possible."
What does this mean for healthcare consumers?
The ultimate efficacy of these rules will come down to consumer adoption. Right now, the system is set up against the consumer. For example, insurance companies and providers negotiate rates behind the scenes and consumers generally have no clue what the actual cost of services is until they receive a bill. Though consumers may know their portion of the overall cost, it is also very rare that a consumer would know the total price of a procedure in advance. While most insurance companies have tools for consumers to plan/price procedures, there is a need for more granular transparency and accessibility to the facts and figures.
What’s Next for Price Transparency?
Simply, price transparency needs to be more public and more digestible in order to help change consumer behavior and increase adoption of price transparency tools over time. Consumer agency starts with information sharing. Moving forward, it will be paramount for consumers to rely on expert public health officials in order to understand their healthcare needs, how much they are and logistics of how to pay for procedures and drugs. While recent legislation is a step in the right direction, we have more work to do when it comes to improving price transparency for all.
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