Though it is sometimes hard to see through the thick haze of government-imposed health reform, the US is also on a parallel path toward market-based healthcare consumerism.
Free-market solutions have taken a back seat to politics for the past few years, but the journey which began with the introduction of high deductible health plans a decade ago, continues today.
The area of price transparency, however, is now on a fast track toward broader market acceptance and increasing consumer usage.
Here are five notable events or trends to note which support the continued expansion of the price transparency in healthcare:
1. Published data. One seminal moment occurred in May of last year, when CMS released data from 3,300 hospitals that listed the average prices they charged Medicare in 2011 for the 100 most common inpatient services. They followed this up a month later with information on pricing for 30 common outpatient procedures.
2. Major article. These data releases followed Steven Brill‘s epic Time Magazine article that appeared in March. “Why Medical Bills are Killing Us” highlights numerous examples of outrageous pricing scenarios and their impact on patients. For healthcare insiders, it wasn’t breaking news, but it did bring significant media coverage to the issue for the general public.
3. Vendor companies well capitalized. There are at least a couple dozen start-up firms specializing in this area, including Castlight Health, Change Healthcare and ClearCost Health. MedCity News recently reported the amount of investment firm input into the start-ups at over $400 million since 2010.
4. Health plan price tools. Health insurers have been actively pursuing this area and most offer some sort of price comparison resource to their members. In fact, Catalyst for Payment Reform notes that 98% of health plans do offer an online price comparison resource – yet only 2% of members who have such resources actually use them.
5. Higher deductibles. Over the past few years, many consumers have become responsible for a larger portion of their medical bills. Kaiser Family Foundation reported that in 2013, 38% of those with employer health coverage had deductibles of $1,000 or more, compared with just 10% in 2010. And the impact of health reform will drive many more insured to higher deductibles.
The Wall Street Journal recently published a front page article on this topic as well, lending further credence to this important trend.
We’re definitely on a path toward broader availability of price information for consumers.
This is a big step forward in the continuing move toward healthcare consumerism in the US market… stay tuned…!
Note: Later this month, I’ll have the privilege of moderating a panel discussion on Price Transparency at the HR Executive Health and Benefits Leadership Conference in Las Vegas. Joining the panel will be Clayton Nicholas of Change Healthcare, Chris Santas of ClearCost Health and Scott Matthews of Castlight Health. Each of their companies has been working to help bring a greater degree of consumerism to healthcare, by helping individuals make smarter healthcare decisions.
This is an important time for this burgeoning healthcare service. Employers and health plans are increasingly promoting the use of price transparency tools and resources. We expect a full house with many great questions and equally insightful responses. The panel is scheduled for Tuesday, March 18 at 1pm.