Upcoming Price Transparency Laws Will Impact Healthcare: Get Ahead With These Three Steps
Price transparency has come to the fore. In January of this year, hospitals started being required to publish what were once closely guarded pricing lists to the public. This has caused confusion for consumers.
Fast-forward to later this year, and the White House issued a new executive order on price transparency. Hospitals will soon be forced to expose negotiated prices between themselves and payers. The administration believes that informing consumers on price before receiving care will increase competition.
To get ahead of the sea change that will come when price transparency takes hold, healthcare organizations (HCOs) must:
- Differentiate with competitive pricing. Legislators are about to shed light on out-of-pocket costs, with the intention of empowering consumers with pricing information prior to their receiving “shoppable” healthcare services. As a result, HCOs need to analyze pricing from an out-of-pocket cost perspective and ensure that the bottom line for consumers is competitive and defensible.
- Mandate consumer-friendly billing practices. Shut down surprise medical bills. Nearly every hospital in the country has independent provider groups delivering clinical services within the facility. In some cases, these providers work at in-network hospitals but bill as out-of-network providers, drastically increasing the out-of-pocket cost for consumers. HCOs must reign in these predatory behaviors now before consumers shop with out-of-pocket prices.
- Monitor revenue and cost drivers. Improve cost analysis. Many hospitals do not know the total cost of care for a given treatment or procedure. Differences in treatment methods across providers create variation in the actual cost of care. To compete on price, HCOs need to develop a deeper understanding of the direct cost of care and the clinical variation that influences it.
The U.S. Department of Health and Human Services has been given 90 days to draft a proposed rule on how it will implement these changes. In the interim, the White House has made it clear that additional executive orders on drug pricing are imminent. The administration continues to make efforts to simplify complex healthcare costs and create more meaningful price transparency in healthcare, and this trend shows no sign of abating.