Essay Example on U.S. Healthcare Cost Transparency: Challenges & Benefits

Introduction

Healthcare cost transparency in the U.S. has been an issue that has attracted significant controversy over the years. Transparency of costs is essential in the health sector as it could help patients pick facilities that will give the best value for their money by delivering optimal quality care at affordable costs (Muir et al., 2012). Besides, the prices of health care services vary considerably among providers which often makes it challenging for patients to establish their off-pocket costs before receiving care (HHS, 2019). With transparency, patients will be better placed to select high quality and low-cost providers to enhance competition among hospitals based on the quality of care. Thus, there is a need to adopt a favourable policy. My policy proposal is devising a provider directory for all both insurance providers and healthcare facilities.

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Issue

U.S. citizens often get deficient care despite paying handsomely for it. Many people do not utilize preventive care and often spend heavily on complex and advanced diseases. Patients with chronic conditions such as heart disease and hypertension often get inefficient treatment despite having insurance covers (Ballotpedia, n.d). Such a problem is worsened by a lack of organization in the healthcare system. The providers lack payment support systems that would enable communication, hence promoting the quality of care offered.

Furthermore, research shows that there is a considerable variation in procedures and settings, visit specialists, duration of stay, and costs for different hospitals even within the same area (Stadhouders et al., 2019). However, patients lack such information and are often overcharged. Thus, it would be essential to have a system where patients can compare costs for non-emergency hospital visits to make informed decisions.

Policy

The issue of healthcare cost transparency has encountered several policies over the years. In 2010, the then president signed the affordable care act into law to increase insurance coverage and reduce healthcare costs. The legislation aimed at enhancing the quality of care and some people argued that the bill would only increase health costs while lowering the quality of care (HHS, 2019). Four years later, in 2019, a policy that required hospitals and insurers to publish their negotiated and confidential rates of treatment was enacted. However, although the law was well-intentioned hospitals cited several cons of the policy, hence calling for the formulation of a new code. Some of the disadvantages include increased confusion among patients, restraining innovation in the healthcare industry, and encouraging anticompetitive behaviors among health insurance providers (Powers, 2018). Over the period, the American health system has performed poorly in transparency relating to costs. As such, there is a need to adopt a policy that will ensure prices are clear to patients.

Description

The proposed policy will involve offering a provider directory. All facilities and medical insurance providers will be required to have a provider directory outlining the prices for each service provided. Healthcare firms will be required to include a price section in their websites and create brochures. Equally, medical insurance covers must have clear price lists without any hidden costs. As such, patients will have a chance to compare the costs of various hospitals and insurance providers to select one that offers quality services and aligns with their cost expectations (Muir et al., 2012). Each hospital and the medical insurance firm will be required to present accurate information in these documents, which will be regularly evaluated by various authorities to ensure their consistency. With this policy, patients will be better placed to make informed decisions since costs will be transparent.

Strengths

This policy has several strengths, including enhancing confidence and reducing inquiries. It would help lower the number of queries made about the prices of different facilities and insurance carriers. Patients would have access to accurate and comprehensive info about various providers. They would thus quickly and efficiently select the best care choice based on their needs (The Commonwealth Fund, n.d.). Patients would also have higher confidence in making decisions relating to their health. Presently, most patients are held back from visiting hospitals for preventive care since they are uncertain of the amounts they will incur and the quality of care offered or insurers who have the best options (Blumenthal et al., 2019). However, with provider directories, patients can conduct comprehensive research on the various providers and make informed health decisions.

An indirect benefit of this policy would be enhancing low-cost, high-quality care. With increased disclosure, hospital and insurance costs may reduce, which would greatly benefit patients. The providers will compete healthily to offer the best value for money to attract more patients (HHS, 2019). Each of the providers will strive to draw patients by offering lucrative deals while assuring them that they will maintain the highest standards. Besides, insurers and health facilities could be prompted to devise customized solutions to draw clients. Subsequently, patients could benefit from low costs while receiving quality care.

Weaknesses

Nevertheless, the policy has several weaknesses, including hiding of prices, the continual increase in the cost of care, and inaccessibility to technologically inept people. Some providers may take advantage of medical terms to include additional charges hidden from the presentations. Some conditions, such as in-pay and out-of-network, may not make much sense to some patients, and some providers could use such loopholes to increase costs (Azar et al., 2018). It may also be impossible to include the diverse range of services in brochures which leaves room for cost hiding. The policy could also lead to an increment in healthcare costs. Some providers could quote higher prices which some patients could interpret as implying higher value (Powers, 2018). As such, it could make care inaccessible to some people since they would be forced to choose low price options which they may associate with poor quality. Furthermore, although there is increased technology use, a significant part of the population is not well equipped to handle the associated devices. It would thus be challenging for them to benefit from transparency when they are unable to decipher or reach it.

An indirect weakness of the policy is the likelihood of its rejection by stakeholders. Healthcare facilities and medical insurance providers could argue that the plan goes against their confidentiality and exposes them to competitors (Stadhouders et al., 2019). Besides, they could cite the lack of the necessary features to enhance accuracy in the information presented and effect changes when necessary. Other supportive policies could thus be required in the long run to support the efficiency of this proposal and ensure its optimal success.

Limitations

Some of the limitations of the policy include feasibility and challenges in turning it into law. The plan could be considered unfeasible since providers offer a wide range of services and would thus be required to publish large documents or write long articles to encompass all their services. Patients are often seeking emergency services and may lack time to go through such materials. They may also find the documents overwhelming and thus seldom use them when seeking care. Conversely, it would take time before the policy into turned into law. There are vast processes involved in setting such proposals into laws (The Commonwealth Fund, n.d.). The legal processes may thus pose a challenge to its implementation.

Argument

There are other general ways of handling this problem, including price disclosure and predictive engagement. While the two could be applied in solving the issue, they have vast limitations that make them inapplicable. Revelation, as suggested by the 2019 policy, goes against the confidentiality policy of health facilities which has led to significant rejections from many providers (Azar et al., 2018). On the other hand, predictive engagement solely focuses on patients that need high-cost procedures, hence leaving out a significant portion of people who need healthcare services. Its use of predictive analysis could also vary across different healthcare facilities and could, therefore, be ineffective. Provider directory presents an ideal solution. It does not force hospitals and insurance providers to disclose confidential information since all they have to list are their charges for different services. Besides, it encompasses all patients, regardless of the severity of their health conditions. As such, it would offer an ideal policy to enhance cost transparency in the field.

Conclusion

Overall, it is paramount to introduce another policy to enhance cost transparency in the healthcare sector. Previous administrations have faced significant rejection owing to their exposure of confidential information and the exclusion of certain scopes of care. However, the provider directory offers an ideal solution as it can be applied to both hospitals and insurance providers and will ensure patients are well informed of the costs of care. It will thus be an excellent choice to counter the challenges associated with the previous models. Although it has several limitations, additional supportive policies could be included to enhance its applicability hence promoting the much-needed transparency in the field.

References

Azar, A., Mnuchin, S., & Acosta, A. (2018). Reforming America's healthcare system through choice and competition.

Ballotpedia. (n.d.). Healthcare policy in the United States. Retrieved from https://ballotpedia.org/Healthcare_policy_in_the_United_States.

Blumenthal, D., Gustafsson, L., & Seervai, S. (2019, July 3). Price transparency in health care is coming to the U.S. - But will it matter? Retrieved from https://hbr.org/2019/07/price-transparency-in-health-care-is-coming-to-the-u-s-but-will-it-matter.

HHS. (2019, November 15). Trump administration announces historic price transparency requirements to increase competition and lower healthcare costs for all Americans. Retrieved from https://www.hhs.gov/about/news/2019/11/15/trump-administration-announces-historic-price-transparency-and-lower-healthcare-costs-for-all-americans.html.

Muir, M. A., Alessi, S. A., & King, J. S. (2012). Clarifying costs: Can increased price transparency reduce healthcare spending. Wm. & Mary Pol'y Rev., 4, 319.

Powers, J. S. (2018). Through the Looking Glass: Visions of the Future of Health Care. In Value-Driven Healthcare and Geriatric Medicine (pp. 137-149). Springer, Cham.

Stadhouders, N., Kruse, F., Tanke, M., Koolman, X., & Jeurissen, P. (2019). Effective healthcare cost-containment policies: A systematic review. Health Policy, 123(1), 71-79.

The Commonwealth Fund. (n.d.). Health care price transparency: Can it promote high-value care?. Retrieved from https://www.commonwealthfund.org/publications/newsletter-article/health-care-price-transparency-can-it-promote-high-value-care.