OPINION:
It can be daunting to think about the big-picture challenges we face in transforming our health care system. But there are clear signs that positive change is underway. Most of us just haven’t noticed yet.
After decades of attempts to turn the health care system into a true market, in which forces like competition between providers based on quality and pricing can bring costs down, there is finally reason for hope. The Transparency in Coverage Rule, a tweak to the Affordable Care Act that is being rolled out in phases, is an excellent example.
Under the rule, consumers must be given ready, geolocated access to the prices of virtually every medical test and procedure so they can decide for themselves whether to spend, say, $800 for an MRI of the lower back or $6,000. And in many cases, the price for an MRI of exactly the same quality can be that dramatically different within a 10-mile radius.
This massive and massively welcome sea change in health care has started unfolding, and health providers, insurers and employers are scrambling to keep up. Why? Because on Jan. 1 of this year, a $100 fine per health plan member per day went into effect for employers that fail to arm their employees with comprehensive, transparent, easily accessible competitive pricing options for their health care.
Since an employee, on average, actually represents 2.2 members (due to family plans), that’s an average of $220 per day per employee. That translates to $8,030,000 in penalties per year of noncompliance for a company with 100 employees.
The federal government has signaled it is serious about enforcing the rule and levying the fines, and that consumers will have access to the necessary data to shop around and the ability to decide for themselves where to be tested or treated.
Obviously, businesses need to avoid this potentially catastrophic outcome. That means owners and executives must insist that their health care brokers provide software tools that they can pass along to their employees to comply with the Transparency in Coverage Rule.
As of this year, the different prices charged by all health care providers must be made easily available to all employees (on their electronic devices, for example) by employers for 500 key medical services — a great start indeed. But on Jan. 1, 2024, it gets better. When this next phase rolls out in just a few months, prices charged by providers for all medical care services must be made available.
In the past — and it will soon seem like the distant past — consumers didn’t care that much about pricing. They weren’t actually paying.
But that’s over. Lots of consumers have high-deductible health plans. They aren’t going to pay $5,000 for something that they can get for $400 — especially when they can now be provided access to technology such as that developed by my company to enter virtually any test or procedure into their smartphones and see the price of essentially every test and procedure from every provider for miles around.
Companies won’t just provide this technology to employees to avoid fines (though that’s a powerful motivator). They’ll also want to provide it because if they are self-insured, then the savings achieved through price transparency go right to the bottom line.
And if they’re not self-insured, then the savings soon result in decreased health care premiums paid to insurers.
After so many years of stagnation in the health care marketplace and economic disempowerment of patients, health care consumers are being armed with the tools they need to stay healthy, to be autonomous and simultaneously make real progress in the long process of transforming the health care system in the United States — thanks to a government initiative.
• Mark Galvin is the founder and CEO of Talon and was instrumental in the development and adoption of the Transparency in Coverage Rule.
Please read our comment policy before commenting.