Newtown, CT – October 5, 2012
It's time for a Consumer-patient's Right To Pricing Information Act – A 2011 Government Accounting Office report on Health Care Price Transparency concluded that: "meaningful price information is difficult for consumers to obtain prior to receiving care". And when you consider that, according to the 2012 Kaiser Family Foundation survey of employer health care coverage, one in four employees in small firms were covered by a high deductible/high co-insurance plan, and one in five employees for all firms, the need for up front pricing information isn't simply a "nice-to-have", it's become a must-have. That's because a growing portion of consumer-patients need to fully understand and plan for the healthcare expenses they will have to bear when undergoing medical procedures. Consider one example, using the NH HealthCost site (which is one of only two identified by the GAO as providing useful information to consumers). The estimated out-of-pocket expenses related to normal vaginal birth and new baby care for a plan member covered by Anthem, with a $1,000 deductible and 20% co-insurance varied from $2,400 to $3,900 depending on the facility. Without this up front information, tailored to a plan member, and taking into account their benefit design and network options, a consumer would face significant additional financial liabilities.
What this means to you – While many states have launched efforts to improve cost transparency, they fall short of providing an individual consumer-patient with the specific expected cost for a medical episode of care, at the point of need, in a comparative form. That's because only the health plan sponsor can provide that information. The health plan sponsor tracks the deductible already applied to past services, as well as the limits to out-of-pocket expenses. The plan sponsor also knows the current negotiated fees contracted with each provider in the network. Consider that in the example above, the potential swing in out-of-pocket expenses for the patient is $1500, or roughly a month's worth of take-home net pay for an average employee. Some plans, such as Aetna, have tools that are a good start in answering these plan member information needs, but more is needed. A health plan sponsor should have an obligation to provide an enrolled health plan member with timely, accurate and complete information on the expected out-of-pocket cost liability related to a defined episode of medical care, by provider in the network. Such episodes should include, at a minimum, (1) elective procedures such as cardiac stents, screening colonoscopies, joint replacements; (2) chronic conditions such as diabetes, asthma, chronic heart failure; (3) acute events such as cancer. Information about the expected out-of-pocket cost should consider the plan member's benefit coverage rules, account for stipulated limits and past expenses applied to those limits. Barring legislation, employers should demand such transparency in their health plan contracts.
Francois de Brantes
Health Care Incentives Improvement Institute, Inc.