Going Below The Surface E-newsletter: January 2021
January 26, 2021
With the Biden administration now underway, Going Below The Surface is continuing to keep tabs on health care spending and policy topics. We’re committed to sharing with you the latest health care trends, research findings and policy proposals impacting our health system in 2021. Read on and be sure to share the issue with your colleagues.
Adding more transparency to the prices of health care services is one potential strategy to reduce costs for patients and overall system spending. This month a federal rule went into effect that requires hospitals to post the negotiated prices of “shoppable” services like knee replacements and baby deliveries. Another rule, slated to take effect in 2022, mandates health plans post specific negotiated rates and consumer cost-sharing information broken down by service. These regulations have the power to change market dynamics across the country, argued Mathematica researchers, but the impact on health care spending remains unclear.
On the surface, more transparency could pressure health plans to reduce premiums, encourage hospitals to find ways to lower costs and increase market share for more affordable providers. However, there could be some challenges. Transparency regulations could backfire. If providers with historically low prices see that others are charging more, they could raise their prices. There is also the hurdle of getting consumers to use this information. Previous studies demonstrate patients obtain care from wherever their physician suggests, even if lower-cost options exist.
Why it Matters:
Empowering patients with cost information could help them make smarter financial decisions regarding health care procedures and services. But policymakers and other stakeholders should be prepared for the potential unintended consequences of these rules. Despite the skepticism, there could be reasons to stay optimistic. Two recent surveys show consumers are interested in learning more about health care prices. Additionally, several smaller-scale price transparency initiatives have shown positive cost savings. It will be critical for policymakers and health care stakeholders to analyze the effects of the recent transparency rules after sufficient time has passed.
Not surprisingly, there are no easy answers when it comes to addressing health care costs. That’s what we gleaned from two articles that evaluated different policy proposals.