This year there’s been a lot of discussion and even legislation and a recent Executive Order regarding transparency of healthcare prices.
Transparency can mean different things in different situations. Transparency and disclosure of compensation by brokers, administrative costs, and the cost of healthcare – especially Hospital pricing.
Earlier this year the Trump administration required hospitals to publish their charges – which is a good thing. However, to the general public this is very confusing because you really don’t know what procedures and services may be rendered when you go to that facility. It’s further complicated because it doesn’t enable the purchaser to know any of the physician charges, pharmacy, and other related expenses.
In addition to going to the hospital website to find their prices, there are a number of mobile apps on the market that a member view comparable costs, which is important if you’re having to pay most of it through an annual deductible and/or out-of-pocket exposures.
Transparency is supposed to enable the consumer to be a wiser purchaser of healthcare, knowing what price they’re going to pay for an MRI, CAT scan, or some other procedure or service at a hospital.
At the end of the day, while transparency is a great step in the right direction, what it really shows the consumer is who’s hospital price is worse than another. In other words, it’s relative if all the hospitals are charging excessive and egregious prices – whose price is worse than the next? It doesn’t address their excessive mark ups above their reported cost to the Centers for Medicare and Medicaid (CMS), nor does it reflect what their average reimbursement is from Medicare for that procedure. No one wants a hospital to go out of business or lose money. But it’s all about what’s fair. Fair reimbursement to the hospital, and fair to the member or the employer who is actually paying the actual claim – whether the plan is self funded or fully insured.
The worst financial arrangements are the ones through an insurance company’s PPO Network – Discount off of what? The best arrangements are ones that are negotiated with direct contracts with physicians and facilities whereby that provider is reimbursed a fair and reasonable profit. If an employer is unable to reach an agreement with a provider, then the next opportunity that we take with our clients is to pay that provider based upon two different metrics – Cost Plus or Medicare Plus – whichever is the greater of the two. Every hospital who accepts Medicare musts report their cost to CMS, and it’s on that basis that a determination can be made in a reimbursement that represents a fair and reasonable profit.
If you learn like if you’d like to learn about how you can benefit from this methodology rather than the proverbial PPO discount off of what, shoot me an email at firstname.lastname@example.org or give me a call at 970-349-7707 and we can chat.