Biden talks of healthcare $$ woes, but solution exists
“Too many of you lay in bed at night staring at the ceiling, wondering what will happen if your spouse gets cancer, your child gets sick, or if something happens to you,” President Biden said during his State of the Union Address. “Will you have the money to pay your medical bills? Will you have to sell the house?”
Biden accurately described the broken American healthcare system, whose outrageous prices have put 100 million Americans in debt and scared nearly twothirds from accessing care for fear of financial ruin. According to a December poll by the Kaiser Family Foundation, 91% of Americans are concerned about rising medical bills.
Yet Biden failed to connect the dots to the needed policy reform to give American healthcare consumers peace of mind: price transparency. While he touted his progress in stopping “surprise” medical bills, this success is largely a misnomer. Under the healthcare status quo where prices are hidden, every healthcare bill remains a surprise.
Patients and employers are blinded to hospital prices then blindsided by enormous bills that they otherwise may not have agreed to if prices were known upfront. Biden could have been referring to current healthcare environment in his speech when he said, “Capitalism without competition is not capitalism. It’s extortion.”
Actual, upfront prices are required to usher in a functional, competitive market that empowers patients, employers, and unions to shop for the best care at the best prices and fight medical billing overcharges, errors, and fraud.
The Biden administration doesn’t need to wait for new Congressional legislation or even issue a new rule to achieve this healthcare reform victory. It simply must robustly enforce an existing hospital price transparency rule that only 24.5% of hospitals nationwide are complying with, according to a new PatientRightsAdvocate.org study.
The hospital price transparency rule, which took effect on Jan. 1, 2021, requires hospitals to publish online their discounted cash and insurance plan rates. Fully realized, the rule can drive down healthcare costs by introducing choice and competition-based capitalism to the American medical system.
With full compliance, tech innovators can aggregate hospital price disclosures in consumer-friendly web applications like Kayak or Expedia so that consumers can shop for care like any other product or service in today’s economy. Consumers will then be able to spot well-documented vast price differences for the same care, even at the same hospital, and avoid price gouging in favor of quality, less-expensive alternatives.
A new study in Nature finds that the cash price of a prostatectomy varies nationwide from $1,476 to $47,445. When real prices are known, no consumer will tolerate paying 32 times more than another for the same care. Employers, who provide most Americans with private coverage, can share ensuing savings in the form of lower premiums and wage increases.
Consider the union SEIU 32BJ, which saved $30 million on its health plan, generating funds to give its members $3,000 bonuses and their largest pay raise in history, by shopping for care. Last year, it excised NewYork-Presbyterian Hospital from its health plan after analyzing its claims data and discovering the hospital was price-gouging its members. For example, the hospital billed the plan an average of $10,368 for outpatient colonoscopies versus $2,185 at the city’s public hospitals. When all hospitals publish their real prices, other consumers can easily follow suit. Unfortunately, PRA’s new study shows that three-quarters of U.S. hospitals are still not complying with the rule more than two years after it took effect. Roughly half aren’t posting clear insurance plan prices, preventing comparison shopping. And 5.8% willfully flout the rule, refusing to post any price file at all.
Some of the nation’s largest hospital systems, including HCA Healthcare, Tenet Healthcare, Providence, Avera, UPMC, Bon Secours Mercy Health, Christus Health, and Mercy Health, have a compliance rate of zero.
Despite hospitals’ continued disregard of the rule, the Department
of Health and Human Services has only fined two hospitals out of the thousands nationwide that haven’t complied. Yet even this meager response demonstrates the power of enforcement. These two hospitals quickly became compliant and posted exemplary pricing files.
PRA’s study confirms that consumers urgently need robust enforcement of this rule. By immediately issuing financial penalties to the thousands of noncompliant hospitals nationwide, the Biden administration can make the hospital price transparency rule a reality, reverse runaway healthcare costs, and help Americans sleep at night.