Health insurance companies must be transparent about pricing: marketing professionals

Americans are demanding more price transparency from health insurance companies, but experts say nothing will change unless companies waive their “nondisclosure clauses.”

Most American consumers have a hard time knowing exactly how much their drugs and treatments will cost because hospitals and health care providers rarely disclose their exact prices to the public.

Even after the Consolidated Appropriations Act of 2021 is passed, patients often end up getting lost and paying much higher fees than expected.

The bill would require health plans to post in-network rates, allowable out-of-network rates, billable rates, and negotiated rates for prescription drugs. It also added a “No Surpris Act” to protect people receiving care from out-of-network providers when access to in-network services is limited.

It also prohibited health insurance companies from entering into agreements that limit cost information. Following this, the U.S. House of Representatives passed the Cost Cutting and Improving Transparency Act, which strengthens price disclosure requirements for ambulatory surgery centers, laboratories, and imaging centers.

But the average American still finds pricing options difficult to access and fully understand, said Daniel Weinbach, CEO of the Weinbach Group, a health care marketing firm. Told. Many providers simply chose not to follow the new rules.

Even for those who do, the files available online are often many pages long and not easy to read. This means that many patients are unable to obtain the information they need before making decisions about treatment and health care providers.

“For providers to be transparent about pricing, they and their insurance companies will need to waive contractual provisions requiring confidentiality regarding negotiated rates for each service,” Weinbach said. Told. Newsweek.

Additionally, available information does not include data on provider quality, and patients are rarely able to distinguish which option will yield better outcomes and patient satisfaction.

Price transparency is further complicated by the sheer number of plans available in the U.S., said Louise Norris, health policy analyst at healthinsurance.org.

“Price transparency in health care has historically been a challenge, complicated by the fact that each health plan negotiates its own prices with medical facilities and professionals,” Norris said. newsweek. “Therefore, the price of a particular product or service is determined by what health plan a patient has and where they receive care.”

If price transparency is to be fully realized, providers will need to break the mold, set an example, and encourage others to follow.

“Once a big leader or two emerges, more providers are encouraged to follow,” said Dominick Micali, vice president and senior benefits sales leader at Conner, Strong & Bucklew. “There may be a knock-on effect of newly available price information,” they said in a recent report. .

Further legislation may also be needed to ensure full provider compliance, which could be enacted at the state level.

But further regulation is only helpful to the extent that consumers are aware of it, Norris said.

“States can set more stringent requirements for health care providers and state-regulated health plans, and of course those entities can go beyond minimum price transparency requirements,” Norris said. said. “However, data is only useful to the extent that consumers can use it and feel comfortable making healthcare decisions based on pricing data.”

Many patients now undergo surgery with a provider recommended by their primary care physician, regardless of coverage or pricing details.

“For example, if a patient simply wants to go to a particular specialist recommended by their doctor, or if they want to use the hospital closest to their home, price transparency data is irrelevant to them, and the patient's interest There's no subtraction. In terms of overall cost,” Norris said.

Americans are suffering from a lack of transparency.

Many Americans are suffering as a result of the lack of transparency, Weinbach said.

“The true cost of health care services is often not known until you access the service,” Weinbach says.

Beyond that, he said, a lack of price transparency means health insurance premiums and consumer price sharing are higher than necessary, both in terms of deductibles and out-of-pocket costs. said.

So why do healthcare providers and insurance companies maintain price transparency with consumers? It comes down to basic business incentives.

“Both providers and payers are less willing to support price transparency because it exposes their revenue models to the same kinds of price pressures we see in nearly every other industry.” said Weinbach.

Weinbach added that health care spending as a percentage of gross domestic product continues to rise faster than other sectors of the economy because of these practices.

However, that does not mean that health insurance premiums are sustainable over the long term. Weinbach said government-subsidized health care programs such as Medicare and Medicaid continue to put significant pressure on health care providers to lower prices.

“Eventually, it will become unsustainable for one set of patients, those with subsidized insurance, to pay significantly less than those with commercial insurance. Deaf,” Weinbach said. “The imbalance will result in flattening out prices for all involved.”

Kirat Karode, CEO and founder of a managed market network called HealCo and Pinewood Family Care Co, echoed this sentiment and hope for the future.

“The secret relationships that pervade the current system inflate costs, obscure accountability, and undermine the trust that is essential to patient care,” Karode said. Newsweek. “This status quo cannot continue and we are on the cusp of change.”

He sees a path to full price transparency through a combination of legislative action, industry leadership, and consumer and employer demand.

“To make this vision a reality, it is essential that governments, health care providers, insurers, patients, and especially employers come together to demand change,” Karode said.

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