Price Transparency and the Future of Healthcare

In November 2019, under the Trump Administration, an executive order was issued to help improve price transparency within the United States’ current healthcare system. The order can be described as one that allows the patients to be more aware of the price of the services that they wish to acquire. 

As per the new price transparency order, patients are prior informed about the decisions that they wish to take regarding their health.

Under this historic order that was passed in the US, it is expected that more innovation will take place in the healthcare sector, adding sufficient value to it. It will also help in providing important information to the patients, healthy competition that is expected to result in a less inflated amount of the total bill of the hospitals.

Around the same time that the orders for price transparency came out, the Center for Medicaid Services (CMS) also announced that they will do whatever it takes to help improve price transparency in the healthcare sector in the US. The goal being to make the life of patients easier and increasing competition among hospitals, both in the private and public sectors.

Price transparency and its significance

As per the CDC, about 47% of Americans have a High Deductible Health Plan (HDHP). This means that they have a higher financial responsibility to pay off their medical bills than any other monetary responsibility. The US healthcare system is also one of the most expensive while being the least efficient when compared to other developed countries in the world.

With the involvement of third parties in the payment process between the hospitals and the patients, the total billing amount often becomes complex, leaving ambiguity amongst all parties involved, especially the payers i.e. the patients. The price transparency order will more likely help get rid of this confusion as it prohibits the role of the middle man.

According to a HFMA survey conducted in 2019, it was found that patients who had a HDHP were required to know the prices of the services they wanted to receive in advance. The survey also revealed that after the orders for price transparency were passed, both the private and public sector hospitals had started to reduce the prices.

The future of the healthcare system in the US

There is no doubt that this sudden order of price transparency has come out as a daunting surprise for hospitals in the US. To be able to move forward, there is a dire need to make amendments in the already established healthcare sector in the US. 

This may take up time but, with the help of experts and a strategic plan, the process can prove to be vital for both the hospitals and the patients, without the involvement of a third party. 

One thing is for sure that ever since the announcement came, patients have welcomed it with open arms and it has proved to be a step that should have been taken long ago.

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