Back in November, the Trump administration introduced new regulations aimed at curbing the seemingly uncontrollable rise in healthcare costs nationwide. In a departure from the political norm, this new piece of regulation targets procedure cost disclosure and increasing competition among healthcare providers.
According to Health Affairs, this new rule “introduces into federal price transparency requirements the concepts of service standardization, consumer-friendly organization and terminology, and bundling.” The medical field remains the only industry which does not have widely available pricing for the services consumers use, and because of that Americans are unable to shop around for healthcare.
Health Affairs adds, “the new rule supplements an existing requirement, from a rule published last year, which forced hospitals to post online all of their charge master rates starting in January of this year.”
The current rule does little to help consumers as most codes, pricing, bundles, and terminology is indecipherable to most Americans, and will often vary from clinic to clinic. Inconsistency in what each package and service listing means and includes makes shopping impossible. Hospitals are also known for not being upfront with which additional services will be charged for prior to, for example, a simple operation. Blood tests, antibiotics, anesthesia, etc. might be listed as separate line items and no included in the quoted price.
The new rule combats this by requiring healthcare providers to be more specific and provide real prices paid for all inclusive packages.
“Hospitals would be required to post their privately negotiated rates for a list of 300 shoppable services.” 70 of which were predetermined in the regulation while the remaining 230 are to be chosen at the facilities discretion. There will now be a standardization of some of the most common procedures so consumers can shop around for the medical services they need.
Not surprisingly, special interest is not on board with the new rules. Hospitals in California, Nebraska and Missouri joined forces to sue the department of Health and Human Services.
According to Healthcare Dive, “revealing negotiated rates will confuse patients, overwhelm hospitals and thwart competition and said it does nothing to help people understand their actual out-of-pocket costs and what they will owe a provider.”
However, a study by the National Center for Policy Research came to the opposite conclusion. Between 1992 and 2012 – a twenty year period – medical care costs increased in price by 118% while the overall consumer price basket increased by 64%. While this seems like common sense for anyone over 18 in the 90’s, the price increase for elective procedures – ones not covered by insurance or medicare and susceptible to market forces – only increased by 30%.
When looking to get liposuction or laser eye surgery, patients are forced to look around for the best service at the most competitive price. Because people are fully aware of the costs, they’re able to make more informed decisions about how they spend their money.
“Hospitals should be ashamed that they aren’t willing to provide American patients the cost of a service before they purchase it,” HHS spokeswoman Caitlin Oakley said.
The hospitals argue HHS is infringing on their 1st Amendment rights by compelling them to publish confidential information about their business.
A ruling has yet to be made on this case, but if the healthcare industry fails to stop the regulation, it will go into effect January 1st, 2021.