When we think of medical treatment, we rarely think of competitive bidding, but that concept is as applicable to medicine as it is to construction. Pricing transparency, anyone?
The Trump admin did something to make the price of medical treatment more competitive, by issuing new rules via an Executive Order.
Trump explains pricing transparency.
The new rule that impacts healthcare pricing transparency the most is:
Calendar Year 2020 Outpatient Prospective Payment System and Ambulatory Surgical Center Price Transparency Requirements for Hospitals to Make Standard Charges Public.
Who makes up these names?
By way of background, hospitals and healthcare providers do, in fact, publish lists of what they charge for various treatments and procedures. The problem is that they are not the same prices they charge to insurance companies. They are hugely inflated. They are difficult to obtain.
This rule will do several things:
1. The rule will force hospitals and healthcare providers to provide the exact same price info to the insured and uninsured as they negotiate with insurance carriers.
2. This real-time, actual cost information will enable a consumer to shop around to find the best price for a procedure.
3. This will enable the consumer to negotiate better rates and inject competition into the marketplace.
4. This will allow data and information entrepreneurs to create tools to enable consumers to seek out the best price for a given treatment.
5. This will force insurance companies and care providers to become competitive. If you are getting a procedure in a city with multiple hospitals or you are willing to travel, you can find the low cost provider of such services.
6. The rule also specifically requires care providers to provide “machine readable” formatted information such that search crawlers can find, catalog, and publish the information in an efficient manner.
7. There will be penalties for failing to comply with the rule.
This transparency initiative will be immediately applicable to such common service as x-rays, outpatient visits, imaging, lab tests, and bundled services like a Cesarean delivery plus pre- and post-delivery care.
Here is a link to a fact sheet:
Before you schedule that ruptured Achilles tendon repair, know that the medical profession, the insurance industry is fighting this as hard as they can. This will end up in court.
Just know that the Trump admin is on the side of transparency, disclosure, and competition to deliver the best healthcare at the best price. Bravo!
But, hey, what the Hell do I really know anyway? I’m just a Big Red Car. Hey, how much is it for an oil change? Six quarts of 10W40 with some additional fiber?