FSA Friday - 2/15/19 - A rock-solid approach from the Granite State
Transparency. In business, it's a buzzy term as overused as "synergy" or "bandwidth." For health care consumers, transparency is something rare… too rare, if you ask us. But it seems like change is coming, thanks to some honest and open price competition in New Hampshire.
Healthcare Price Transparency in NH Reduced Out-of-Pocket Costs - Jacqueline LaPointe, RevCycleIntelligence
According to a study from the University of Michigan, health care price transparency that seeks out lower-cost providers has resulted in serious savings for consumers. And it all came as the result of a state-run website that allows consumers to directly compare health care pricing for one specific service, magnetic resonance imaging (MRIs).
The result? Savings of 5% for patients and 4% for insurance companies, equaling nearly $44 million in combined cost reduction on x-rays, CT scans and MRIs over a five-year period. Plus, by the fifth year, out-of-pocket costs for consumers were 11% lower than before the website launch.
What New Hampshire consumers quickly learned was that pricing for similar services varied wildly across the state -- as much as seven times higher -- depending on provider. And that's regardless of whether it was for major diagnostic services or the simplest everyday procedures. There was even major variation between neighboring hospitals within the same network!
Thanks to the price transparency offered by New Hampshire's consumer website, patients no longer approached their treatment blindly, nor did they struggle with 'sticker shock' once bills started coming in. Instead, their focus could be placed solely on getting well, and staying that way.
And because the website displays pricing and detailed comparisons between providers, patients can finally take advantage of the consumer's best friend -- competition.
As a result, New Hampshire health care providers are forced to adjust pricing to stay ahead of competitors, not only by lowering base service costs, but also by giving patients a platform to negotiate their own pricing and billing arrangements.
It should be noted that this study was limited to just MRI and related services, and transparency might not be as effective on more-involved services, like complicated surgeries. But make no mistake, pulling back the curtain on the real-world costs of treatment can shift power and ownership back where it belongs -- with patients.
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