The Need for Pricing Transparency in Healthcare

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During his campaign, President Trump made clear his intent to implement transparent pricing for patients when he rolled out a replacement for Obamacare. Drug giant Johnson & Johnson is already moving in that direction. As reported in an article by Bill Berkrot for Reuters, “Johnson & Johnson’s (JNJ.N) chief executive officer said on Tuesday that responsible drug pricing is a priority and discussed changes he would like to see on the U.S. tax code and healthcare policy, one day after meeting with President Donald Trump.”

Transparent pricing will very likely hold a significant position within the new administration’s plan.  What other industry can exist by supplying only estimates? Leading health research consultants, Price Waterhouse Coopers, report that, “Health systems command billions of dollars in revenue and yet few can do what other billion-dollar companies consider table stakes – identify the cost of the services they provide. Now insurers, consumers and other major healthcare buyers are demanding better value for their spending, and healthcare providers are scrambling to calculate these costs.”

True pricing helps consumers
John Santa, M.D., M.P.H., is director of the Consumer Reports Health Ratings Center, an organization that compares health services, products, institutions and practitioners. Dr. Santa agrees that giving consumers access to comparative information could considerably help patients deal with the new health economy. In an article entitled, “Transparency in the Cost of Care,” Dr. Santos states, “Significant increases in bankruptcy related to healthcare costs for insured middle-class Americans indicate how perilous this transition has become. As costs increase, market proponents should insist that consumers have access to comparative information, the price and cost of the products or services compared, and an analysis of the possible scenarios relevant to their purchasing decision.”

Partnerships with providers and payers
As more companies follow Johnson & Johnson’s lead, pressure will build for healthcare providers and payers to publish true costs as well. HealthQRS has created a platform to make this process quick and simple for the healthcare community.

We’ve developed an online medical marketplace that allows providers and payers to create their own centers of excellence where patients can shop for healthcare services, see true pricing, schedule their services and receive discounts if they select times/dates during historic slow times for the provider. Our marketplace even allows patients to pay for services upfront or set up payment plans upon scheduling.

We’ve found that prepayment creates less no-shows and helps providers collect funds that many times end up in collections. Patient satisfaction improves because consumers know upfront how much a procedure is going to cost and they aren’t faced with sticker shock after the fact.

Pressure to publish true prices, not just estimates, will likely come from the market as well as lawmakers. Moving in that direction now gives healthcare providers a strategic advantage and the ability to control their respective markets.

Interested in learning more about HealthQRS’ Retail Medical Marketplace? Click here to schedule a demo, or feel free to contact us with any questions.

[1] Bill Berkrot, “Johnson & Johnson plans more price transparency; eyes U.S. tax, healthcare changes,” Reuters, Jan. 24, 2017, http://www.reuters.com/article/us-johnson-johnson-results-idUSKBN1581F8
[1] Price Waterhouse Coopers Health Research Institute, “Top health industry issues of 2016: Thriving in the New Health Economy,” Annual Report, Dec. 2015, p. 11, https://www.pwc.com/us/en/health-industries/top-health-industry-issues/assets/2016-us-hri-top-issues.pdf
[1] John Santa, M.D., M.P.H., “Transparency in the Cost of Care,” The Healthcare Imperative: Lowering Costs and Improving Outcomes: Workshop Series Summary, National Center for Biotechnology Information, https://www.ncbi.nlm.nih.gov/books/NBK53921/

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