Less than one-fifth of U.S. adults are aware of the cost of their healthcare products and services before receiving them, as shown by a recent Gallup poll. This comes three years after CMS began enforcing its price transparency rule for hospitals and over a year after payers were also required to publicly disclose their rates.
While the goal of CMS’s price transparency legislation is to increase patient awareness of care options and associated costs, thereby cultivating competition and educated consumer choices, current pricing data on provider websites can be complex and difficult for an average American to understand.
Recent advancements in price transparency have presented software companies within the healthcare industry an opportunity to create easy-to-use, personalized tools that interpret and present this data. Software vendors and tech companies appear set to undertake the necessary heavy lifting required in the next phase of the journey.
But even as strides are made in the availability of healthcare pricing data, only a relatively small percentage of people access this information. For instance, Turquoise Health, a price transparency software company, saw monthly users increase from 10,000 to around 50,000 or 60,000 over the period of CMS implementation of hospital price transparency.
While the figure might appear to be small in the context of the total count of individuals receiving care, it doesn’t necessarily imply the failure of CMS’s price transparency regulations. In fact, as Marcus Dorstel, vice president of operations at Turquoise Health, explains, price transparency, in addition to aiding consumers in selecting care options, also allows the industry to make informed decisions. More transparency could influence pricing decisions, thereby lowering overall healthcare costs.
Transparency is significantly important in an industry like healthcare where prices depend on a multitude of factors such as deductibles, copays and whether a provider is in-network or out of network. To make price transparency tools genuinely beneficial for consumers, these factors need to be considered.
Amanda Eisel, CEO of Zelis, a healthcare payment technology company, agrees that the objective of this legislation is to allow tech companies to interpret the data and develop tools to help consumers understand pricing. Achieving user-friendly healthcare pricing data for the public, however, might take another five to ten years, Eisel believes.
Data availability, while a significant breakthrough, isn’t sufficient to ensure that Americans use this information to make informed healthcare choices, according to Eisel. Efforts should be made to raise awareness about price transparency initiatives and foster trust in the data provided. Employers should play a bigger role in this, Eisel suggests.
Hal Andrews, CEO of healthcare analytics company Trilliant Health, likewise believes employers should take a more prominent role in increasing interaction with price transparency data. Employers could make it easier for employees to understand and make better healthcare choices based on this information.
The path to price transparency in healthcare remains an industry-wide challenge. But with the groundwork already laid, healthcare software companies stand poised to shape the future.
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