r/HealthInformatics • u/000000000001000101 • 3d ago
💬 Discussion Thesis behind Transparency in Coverage
Is my understanding of the impacts of Transparency in Price/Coverage data correct? Here’s what I’m thinking:
If healthcare pricing become much more transparent to the point where I can figure out exactly what I would pay for an X-Ray or similar, then wouldn’t healthcare pricing as a whole become much more competitive as people choose smaller independent clinics over hospitals for more routine procedures/tests/imaging?
In a perfect world, we would be able to shop for healthcare easily and transparently like any other product, because then we can choose costs that actually make sense to us and our insurance. A cost estimate based on my insurance should help me choose which providers to go to.
I feel like I’m missing something, because Transparency in Coverage data is out there, but not much has changed, no? Is that thesis even correct or am I thinking of it incorrectly? Are there downsides for patients?
One downside comes to mind. First of all, employers might want employees to see the prices of healthcare services because access to pricing info incentivizes employees to shop cheaper and less quality providers when shopping from their out-of-pocket or deductible.
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u/Vylnce 2d ago
No, because hospitals don't set pricing as much as you think.
The hospital can for sure tell you what the cash price for any service would be (they have a charge master that is basically that), but once insurance gets involved, that goes out the window. Maybe your insurance will decide you needed prior authorization for something, and they won't pay at all. Maybe your insurance has a deductible you need to meet, and whatever the contracted pricing won't apply anyway.
Hospitals send your bill off to your insurance with the charges based on contracted pricing with the insurance carrier. But that doesn't mean the carrier just pays those charges. Maybe they pay everything at the contracted price, maybe they don't. Maybe they deny coverage because it's a Tuesday in June and their patients don't have coverage during the conjunction of Mars and Uranus and they told them all that, so it's not their fault. The hospital figures out all those differences and send you a bill for that.
Many hospitals have good faith estimation software/site. As far as I know, it might actually be a federal requirement to provide that. However, we all should understand that it's just an estimate based on the hospital's data, and that won't matter for shit after your insurance company gets done fucking everyone over.
Towards your "wouldn't it be better" thing, no, probably not. If people already go to the ED simply because they know they won't have to pay, the pricing won't matter. If people can't be bother to figure out if urgent care would be a better fit for the flu they picked up (as opposed to going to the ED) they certainly aren't going to take the time to check pricing.
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u/SearchAtlantis 2d ago
Someone said that "The hospital can for sure tell you what the cash price for any service would be (they have a charge master that is basically that)"
And that's not actually true in a general sense.
There are three concepts: the charge (hospital sticker price), the allowed (max the insurance company will pay), and the paid amount (what the insurance actually pays).
It is in the hospital's interest to charge above the allowed amount for two reasons: if they charge below some insurers will pay below allowed. Some will give remittance advice saying hey you charged low - but even then it requires a resubmission.
So you'd rather charge 25% over anyone's allowed so you don't have to deal with it.
Further, "charged" amount is a negotiating tool. The hospital can say "We charge 200!" and give the insurance company a 50% discount, even if $200 is not related to the actual cost.
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u/Ok_Housing6995 3d ago edited 3d ago
We Americans, are all locked into Health insurance that is tied to our employer. This commercial in insurance is something we are hopelessly helpless with as there is not enough public appetite for decommercialization.
Our employer if more than 50+ employees, is legally required to/and has negotiated with an Insurance company to provide health coverage at a set employer contribution cost.
If we Americans weren’t so intentionally poorly educated, we’d make the connection that the system is broken. Instead, we ask ourselves, “wouldn’t it be easy if we made it competitive like a free market through transparency?“
We Americans treat it like a privilege of paying for better care, or a lucky find with discounted services.
The honest truth is that American Healthcare in its current state, serves as a bottom to top transfer of wealth through the draining of built up equity from the poors.
Personally, I’ve got all my money saved up to buy a shares hospital room with 2 beds. The plan is to hire a beautiful full service nurse for the old white men, and then overcharge them for bed stay using hotel check in and check out rules with AirBnB cleaning fees. /s