Who is afraid of price transparency?

Americans have grown accustomed to a health care system that deprives them of the most basic information about the cost of their medical care. Think about the last time you bought health insurance. You’ve probably taken into account the differences between PPOs and HMOs, network, deductibles, and incidentals like imaging or lab work. Maybe you’ve considered a plan with a flexible spending account or a health savings account. But it’s almost guaranteed that you weren’t able to compare the prices of basic services and preventative drugs between insurance plans; as a rule, hospitals and doctors’ offices do not share them.

Even after the fact, when patients are given an Explanation of Benefits (EOB), the real price is not clear to anyone. For example, a recent procedure had a list price of almost $ 10,000, but the covered price for networked care, based on my insurance company’s pre-negotiated rate for this service, was less than $ 1,000. . For a small business that pays for the exact same procedure for an employee, the price may have been $ 5,000. For a large employer, maybe $ 1,500. For someone who pays in cash, they have involuntarily entered into a negotiation based on their ability to pay. All of these scenarios are possible, but at no point can a patient find out the actual amount of cash that the hospital has accepted for payment.

President TrumpDonald TrumpTrump lashes out after grand jury sits down for New York City criminal investigation, Schumer suspended vote on Jan. 6 commission bill Senators fight to save Jan. 6 commission MORE identified part of the problem when he issued his decree requiring hospitals to publish prices for “purchasable” medical procedures. The move sparked an immediate outcry from the healthcare industry complex. But the question is why hospitals and health insurers see price transparency as such a threat.

Making the cost of medical procedures transparent re-establishes a hallmark of consumer healthcare markets by re-establishing price signals and leveling the playing field for new market players. To start adding market functionality to Americans’ healthcare, I introduced the Healthcare Price Transparency Act. This legislation, which was also presented to the Senate by the Senator. Mike braunSenators Michael BraunGOP Introduce Bill to Reimpose Canceled Sanctions on Nord Stream All Congressional Democrats Say They Have Been Vaccinated: CNN Let America’s Farmers Develop Climate Solutions READ MORE (R-Ind.), Will take a page from President Trump’s book and require hospitals to publish the prices of some 300 medical procedures online.

While it is possible that patients can use this information to make informed decisions about where to undergo joint replacement, the publication of prices puts pressure on the health insurance market by clearly indicating the cost of entry. to newcomers.

Health insurers and medical providers enjoy a warm relationship. They negotiate prices behind closed doors, and instead of charging uniform prices, patients pay different rates for the same services, depending on their insurance plan and deductible. Not only is this practice unfair in any other consumer market, it creates mistrust of doctors and health insurers. This ends up causing people to avoid seeing a doctor altogether, which can delay life-saving treatment – all because they’re afraid of being hit by large and unpredictable bills.

Regulators have also made it very difficult to enter the market to offer alternatives to the status quo. This is evidenced by the fact that earlier this year three of America’s most visible companies – JP Morgan Chase, Amazon, and Berkshire Hathaway – left of their joint venture, Haven, to disrupt the healthcare system. Despite the size and success of the companies involved, after three years the collaboration resulted in small-scale experiments, but not the big disruption that health insurers feared – and Americans had long awaited.

Ultimately, American patients are the least heard by insurers and the most affected by the broken status quo. Unlike other reform proposals, this price discovery requirement offers a light-weight approach to healthcare reform that will facilitate market entry for new insurers or companies by allowing for competitive price negotiations that are currently not available. not possible.

Our healthcare system needs price competitiveness to provide patients with the best quality care at the lowest prices – or at least to allow all of us to assess how price and quality relate. Price discovery works in every other sector of the economy, and there is no reason why we cannot harness the power of the market to improve health care for Americans. I hope my bill can serve as a starting point to unite Democrats and Republicans to force hospitals and health insurers to move away from the “status quo” and start making changes that restore confidence. of Americans in making accessibility and transparency a priority for their health care providers. for patients.

Davidson represents Ohio’s 8th District.

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