Tackling Rising Health Care Costs with Health Care Transparency

Tackling Rising Health Care Costs with Health Care Transparency

Oct 27 2015

Health care costs are rising at rates that are much higher than many households can afford — no question.

By: Joan Budden

And given the impact it has on families, their personal finances and our overall economy, what’s most concerning is that Michigan is failing to address the issue.

A recent “Report Card on State Price Transparency Laws,” gave Michigan an “F” for failing to make health care cost and quality information widely available to patients. That’s unacceptable; especially considering that today in Michigan, hospitals and health care facilities may charge $1,200 to $12,000 for the same procedure. And, contrary to what many would think, studies show no correlation between the cost and quality of a procedure.

The first step to controlling health care costs begins with transparency.

By allowing individuals to be more educated in the form of pricing information and treatment options, they’ll have the tools and the motivation to engage more in their health care spending and their overall health.

There is no better time to start than now. Why? Because there is a fundamental shift occurring in health care.

Employers are shifting more of the burden of health care costs to their employees as they continue to be plagued by skyrocketing medical bills. Individuals who have high deductible plans struggle to pay large medical bills and are looking for ways to manage their health care dollars that don’t exist today.

Health care is arguably the only industry that has escaped consumer outcry for access to cost and quality information.

And while health care transparency will begin to impact cost in the market and between health systems, one thing is clear: to reduce the cost of health care, patients must have the power to become smarter shoppers and engage in their health care decisions.

What starts as price shopping for an MRI often leads to greater interaction with the entire care network. Patients who “shop” for care will look for value in the care they’re receiving. They tend to research what the procedure is, why they need it and what is the best approach for receiving it.

Nowhere is it more important to create engagement in health care than around the prevention and management of chronic disease; which accounts for 91 percent of health care spending today.

A challenge for hospitals

The shift to a consumer-based market in health care is a tough pill to swallow for some hospitals because it fundamentally changes their way of doing business. In fact, today only 50 percent of Michigan hospitals reveal their pricing.

While many people recognize the challenge for hospitals and the incredible value they provide for their communities – health care transparency is the future of health care. Every hospital system that embraces transparency now and faces these challenges head-on will have a competitive edge as market and consumer demands continue to shift.

Lower health care costs mean a better future for Michigan

Patients should have access to pricing information, personal health plan information, online shopping tools, claims data, deductible balances and prescription costs. Just as they would research before purchasing a television, consumers should be able to compare prices and check quality ratings before making a final purchasing decision or receiving care.

There is an outcry for health care transparency at all levels. Employers, patients and concerned citizens should be demanding transparency. It is the catalyst to begin removing the cloak of secrecy, educating the people receiving the care, driving down the cost of health care, achieving better health outcomes and improving patient care across the country.

If better health care can be purchased for less in a state, that state becomes more attractive as place to do business; spurring competition. Transparency will result in not only healthier consumers but ultimately a healthier economy.

Priority Health is ready to lead this change.

About the Author: Joan Budden is president and CEO at Priority Health. She is a seasoned and dynamic executive responsible for strategic marketing and product development nationwide. She oversees Market and Product Development, Sales, Marketing and Government Programs.