Earlier this week, the Trump Administration had announced a proposed rule that will require hospitals to publicly post their prices for services on their websites. These prices are highly regarded by hospitals as secretive, as these are rates that are privately negotiated with healthcare insurance companies. Hospitals and insurers are speaking out against this rule, arguing that patients care more about their out-of-pocket costs and the price transparency could cause premium hikes.
Hospitals are arguing that the out-of-pocket costs that patients are more concerned about are already available to patients via online cost transparency tools. According to an associate professor at Harvard Medical School, Dr. Ateev Mehrotra, many consumers don’t shop around for healthcare due to the fact that information on pricing is difficult to find. Although hospitals provide the price estimator tools on their website, it doesn’t allow patients to directly compare prices with another provider other than that hospital. The CMS Adminstrator, Seema Verma, argues that the proposed price transparency rule will give patients the direct comparison between providers at different hospitals, making it easier to make a decision. She also assures that the proposed rule is just one step towards full transparency.
Hospitals and insurers are saying that allowing for their negotiated prices available to patients on websites would result to higher premiums for those insured, since the exposed negotiated prices could prevent insurers from securing their discounts from hospital systems. Hospital systems would be less inclined to give an insurer a discount if prices are posted publicly, as other insurers would expect the same discounted rate.
Posting rates publicly would also create increased prices across the board, as those providers whose prices are not as high as competitors would raise prices to meet their competitors. Alternatively, those with higher prices could ultimately lower their prices as well, according to the co-director of sustainable health spending strategies at consultancy Altarum.
Read the original article from Modern Healthcare here.