HJBR May/Jun 2019

Editor’s Desk 10 MAY / JUN 2019  I  Healthcare Journal of Baton Rouge   Smith Hartley Chief Editor editor@healthcarejournalbr.com Agoal in healthcare is to control costs by making pricing choices, as with all other goods and services. However, it doesn’t play out that way in healthcare. It’s a nice notion. The idea that for the deductible portion of health insurance for covered services, consumers could better navigate a choice of providers through pricing of services. Also, if someone is uninsured, they could make healthcare choices based on pricing schedules. However, it doesn’t work like that. According to the NewEngland Journal ofMedicine , there are four goals of price transparency. 1. Doing right by patients (and helping them avoid sticker shock) 2. Lifting the veil 3. Facilitate price shopping 4. Helping providers ensure their patients can afford care Effective January 1st of this year, hospitals must make pricing of services, or chargemaster, available to consumers. This begs the question, why did hospitals not post prices prior to this year? The answer is simply there wasn’t a huge demand for pricing because that’s not how healthcare works. Not much has changed. Price transparency implies the consumer will assume the role nor- mally done by the health insurance company. However, individual consumers have no bargaining power with prices. First of all, nobody is likely intending to pay the chargemaster pricing rates of the hospitals. The rates are almost always inflated and negotiated in some manner by the insurance companies to bring down costs and premiums. There are only a handful of people who both have no insurance, and will pay the full hospital rates with no discount. Even then, I doubt these few people are shopping hospital pricing rates, especially considering that is still not an exact science of pricing due to many possible extenuating service circumstances. All that being said, price transparency is a start. While it probably doesn’t domuch at all to control costs, it begins to bring consumers into the discussion of healthcare pricing. There are possible scenarios where price transparency has value. One potential way in which price transparency can offer value is tomatch contracting rates with payors. That would be interest- ing. It means providers can post prices at the same level of rates payed to them by BCBS or Medicare, or any other payor. This may rock the healthcare world a little, but it would certainly offer real shopping power for consumers. If prices were posted at the same rates paid by insurers, many more people would have fewer need for insurance. More peo- ple would be able to self-insure. One of the great benefits of an insurance company for consumers is the discounted rates on all services provided by hospitals and other providers. If a provider decided to offer those rates directly to consumers, it could capture a market of self-insured people. Afterall, we don’t always need insurance for doctor visits, small procedures, labs, etc. We want insurance for catastrophic situations. We are still evolving, and hopefully improving. Price transpar- ency in its current state is a beginning, albeit a mildly beneficial and somewhat confusing beginning. But there is potential. I hope the market will soon figure out and understand the potential of price transparency in healthcare. Individual choice, priorities, and decisions can be a great driving force for demand andminimizing extraneous healthcare costs. It’s only a matter of time. Currently, price transparency is not that important for healthcare.