Why Everything We Hear About Price Transparency in Healthcare is Wrong & How We Can Change That

In today’s healthcare industry, physicians have virtually no access to the cost of medical services. It is in fact, the only industry where the provider and the consumer do not know how much a service will cost.

Imagine booking a flight and the airline couldn't tell you the price of your ticket until months later in the mail.

Sounds ridiculous right?  This poses the question:

Why is there price transparency in essentially every industry besides healthcare?

Still Searching: Where in the World Is Healthcare's Pricing Info?

In 2017, the Robert Wood Johnson Foundation Study entitled “Still Searching: How People Use Health Care Price Information in the United States, New York State, Florida, Texas and New Hampshire” Here’s what they found:

• 69% of insured Americans with a high deductible health plan above $3,000 have tried to find price information before getting care,

• 63% of Americans who were uninsured at some point in the past 12 months have tried to find price information before getting care

• According to the study, doctors were the most trusted source of price information. 77% of Americans would trust their doctors a great deal when it comes to finding out about the price of medical care

• 46% of Americans who search for pricing information, ask their doctor.

These statistics say many things. The first thing the study makes clear is that people do want to know what healthcare services are going to cost them. I don’t think any patient would debate this point. But health care pricing remains a mystery that can’t be solved by consumers, on their own. While pricing to consumers includes health insurance premiums and payments to providers, only providers have the key to correct the problem that is largely driven by provider decisions and costs. That leads us to the second point, and I would argue more important insight is this: price transparency belongs in the doctor’s office.

Price Transparency in Healthcare: What We've Learned

Price transparency in healthcare has been touted as the key to transforming the U.S. health system for almost 20 years. Consumers remain in the dark about what they will be asked to pay for a medical service and it’s widely viewed as a mechanism whereby consumers can be activated to make better decisions about their care and drive down unnecessary costs. It was a central theme in the Affordable Care Act and is one of the four pillars of HHS Secretary Alex Azar’s strategy to reform the system.

What have we learned from all this? It’s a tale of the now decade-long first wave of healthcare price transparency that has had some effect, but not nearly enough. Price transparency resources are widely available to consumers today. The majority of insurers have built a transparency portal to provide to their enrollees. Investors have funded a slew of third-party transparency start-ups, many of them offering their services through employer-sponsored health plans. Almost every state sponsors a website so constituents can compare hospital prices. Even the non-profit sector is getting in on the action.

If you’re lucky enough to have an employer that has purchased a transparency tool for its employees, and if you’re lucky enough to think about it at this moment, you have to go home and log on. Now you spend an hour using the site, wondering all the while if you’re looking up the right thing, especially since there are several types of MRI’s that can be done for any particular body part. How do you know that you’re researching the right one? How do you know that these prices are accurate? If you think this is not a normal situation, check out this NPR article on this very scenario.

If a consumer is aware of and uses such a price transparency tool, they are in extremely select company. The July 2018 analysis by the National Bureau of Economic Research entitled “Are Health Care Services Shoppable? Evidence from the Consumption of Lower-Limb MRI Scans” validated this by finding fewer than 1% of individuals used a price transparency tool to search for the price of their services in advance of care. Moreover, the researchers found that referring physicians’ suggestions are more critical for patients than out-of-pocket costs. To validate this further, Aetna found its price transparency tool was used by only 3.5% of its enrollees though accessible to all. The State of New Hampshire’s price transparency portal has been visited by only 1% of its citizens in three years, similar to results in other states. By any measure, the use of price transparency tools by consumers has been modest.

But wait, didn’t we start this out by saying that most people want to know what things cost?

We did. And they do. But that information needs to be connected to the path of care and cannot be disconnected. Telling someone to go home and look up how much their MRI will cost is like your real estate agent asking you to sign on the dotted line for your new apartment and then once you sign, you need to go home and look up the price you just paid.

So now what?

While many experts believe government intervention is necessary for true price transparency, I believe that doctors hold the key to sustainable price transparency.

My advice to legislators proposing health reform, instead of listening to academics, health policy wonks, & other “experts”, please take a walk & chat with your constituents. Then find real doctors who actually practice medicine –compared to pretending like they do– & ask what they think.

Doctors: The First Responders of Price Transparency

This is what brings me to why I believe that doctors are the logical first responders to consumers’ need for coherent pricing. To remain in business as it becomes heavily consumer-financed, providers will need to pivot their approach to pricing to better help patients make wise choices. It is in the provider’s best interest to help consumers make affordable and cost-effective choices for their care. This is why we built the MediXall Patient Experience platform to stand on the shoulders of the consumer-facing healthcare marketplace, MediXall.com.

We think that MediXall.com makes shopping for healthcare as simple and easy as booking a flight or hotel, but it needed help delivering our “what you see is what you get” pricing data to the right people at the right time. This is only possible by involving the patient’s physician as the facilitator of the process. The easy to use platform allows easy navigation for practices to find and facilitate personalized care for patients risk-free and without a cost. These practices are able to share cost and location information for prescribed medical care, enabling their patients to discover cheaper and more convenient locations previously unknown. This way, instead of:

"Why don’t you go get this MRI from the same imaging provider where I send everybody”,

or

“Good luck finding a provider on your own”,

it’s more like

“Here’s a list of radiology providers who are in your network and the pricing and availability for each of them, all you need to do is compare the options on MediXall.com and then book and pay for the one that makes sense for you ”

Better care coordination and real-time referral statuses mean patients are never lost to follow up after a referral has been made. Furthermore, MediXall.com automatically follows up with patients to confirm they have taken the next steps, which alleviates this added responsibility for the Primary Care physician's office staff.

The “key” to truly scaling price transparency is to show doctors that in the process of proactively taking their patients' financial health into account, they are creating a patient experience that is second to none. And with all the Millenials and Generation Z now entering the age of managing their own healthcare, the traditional rules of healthcare engagement are being turned upside down. If technology is not implemented to create a seamless experience, these practices will become a dying breed.

And our offer stands to all doctors: MediXall will do all the technology work for the doctor, so long as she or he is willing to be the bearer of good news.