Transparent Pricing is HOT!
To be a consumer market, you obviously need price information. People know the prices for health insurance [and have seen them rise at a shocking 20% per year for 5 years] but not for diagnosis or procedures. Many people don’t even know the difference between a diagnosis and a procedure.
Some people will tell you this is because health care is so complicated, but that argument doesn’t really make sense. Computers are very complicated but people still shop based on price and quality to find value. People don’t even understand the details of how computers work but they still shop on price that’s to companies like Dell.
Why can’t the purchase of health care services work the same way? It can if we let it and it’s starting to happen. We are seeing announcements almost weekly of public and private organizations offering pricing information from CMS to health plans to retail clinics to startups. The most recent news is the state of California’s launch of a web tool to compare prices for surgeries (www.oshpd.ca.gov).
HealDeal was founded on price transparency and is excited to see how this growing trend can enable consumerism to transform the health care system. Stay tuned…
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Alan Ayers said,
June 3, 2009 @ 10:42 am
As patients become responsible for a greater share of their routine health care, they migrate to lower cost, more effective treatment options. Employers find that if employees have no stake in reducing costs-as with first dollar coverage-they will utilize hospital emergency rooms for minor cases. Hospital ERs are built for trauma and although the incremental cost of treating one additional low-acuity patient in an ER is very low (provided there is capacity)-every ER patient has to subsidize all of the equipment and staff that must be in place 24/7 to offer trauma care. It also means patients capable of paying subsidize those who cannot pay through ER billing. When employees have higher co-pays and deductibles-they learn to utilize urgent care, retail care, employer on-site clinics, and consult with pharmacists on OTC products. This saves health care dollars for the employer-allowing the employer to extend coverage to more people and keep employment rates up. The cost of a worker is salary plus benefits-when a new employee is hired 100% of the benefit cost is incurred. However, if existing employees work overtime or jobs are outsourced overseas-benefits costs can be saved. That is why high health care costs adversely affect employment levels. Realizing that consumers are now responsible for an increasing share of their own health care costs, Concentra was the first urgent care provider to offer nationwide posted pricing in all of its centers-with basic doctors visits starting at $75.