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On January 1st, 2021, the Hospital Price Transparency rule went into effect. This rule is requiring that all hospitals reveal:

• Their negotiated rates with insurers.
• The discounted cash prices for services.
• The price of “shoppable” services that patients can plan for.

However, many hospitals are choosing to either pay the $300 daily fine for non-compliance or are finding ways to get around the rule and the fine. As a health plan (or an employer!) you shouldn’t be ignoring this new price transparency rule and all that comes with it. Although there’s been some debate about it, the consensus opinion is that price transparency will undoubtedly drive down overall healthcare costs. For health cost sharing groups, this means lower share costs and expenses for your community. For larger insurers, this means a reduction in overall costs and a reduction in out-of-pocket costs for high deductible health plans. And for employers, this creates an incentive to help employees find the best care at the best price.

So, how can you use price transparency to your advantage and to lower member costs? Keep reading.

Contract with or recommend hospitals that are complying.

If you operate in a network model, do your part to advance price transparency by contracting with hospitals you know are complying with the new rule. Or use your group’s purchasing power to encourage your members to go to hospitals that are complying with price transparency. This is especially important to do for high deductible health plan members, or those who have a larger share of costs that come out-of-pocket. One extreme example of this is Sara Rothestein and the 32BJ Health Fund removing NewYork-Presbyterian from their plan due to the, “secretive contracting practices and out-of-control care prices.”

For plans that don’t operate on a network basis, take the time to find which hospitals are publishing their prices according to the CMS guidelines. Then educate your members so they are aware of the absurd disparities in pricing and can make educated decisions. Not only will this drive down costs for you and your members, but your members will also have a higher level of trust in you for looking after their financial and physical wellbeing.

Provide a way to shop and compare for medical care.

Even hospitals that are technically complying with CMS are displaying their prices in confusing formats. They use complicated healthcare language that the average American wouldn’t know. Members have to search through multiple web pages to find what they’re looking for. Hospitals post incomplete information and prices, or only give estimates instead of actual rates. The list goes on. Due to the lack of clear, organized information, true healthcare shopping isn’t possible with the current state of hospital transparency.

But, the hospitals aren’t the only ones with pricing data. For example, our Smart Healthcare Platform includes an easy-to-use healthcare shopping app. Members can shop for doctors, hospitals, labs, medications, and so much more. Members can shop and compare medical care by using:

• Cash pay prices.
• Their health plans negotiated rates (if your health plan is a partner with us).
• Information on which procedure prices are all-inclusive and which offer a great price compared to similar providers.

Thanks to patient advocacy and healthcare navigation companies like ours, your health plan can start providing truly transparent healthcare prices to your members. This, again, not only leads to lower costs but also improves member satisfaction and your health plan’s reputation.

Final thoughts.

Price transparency is here to stay, whether hospitals and other key players in healthcare like it or not. No matter what kind of health plan you operate, you can use price transparency to your advantage. One of the largest benefits of price transparency is that it will drive down overall healthcare costs over time, but you can use it to lower your members’ out-of-pocket costs right now. This leads to a deeper trust between your health plan and its members, which means better retention and satisfaction. Plus, you'll stand out from competitors by offering a healthcare shopping app based on price transparency that will differentiate you and can lead to higher member growth.

At the end of the day, price transparency really is a win for members and payers.