Technology and Health Cost Transparency
What should medical procedures cost? How do you know if you are paying too much?
It’s often difficult to obtain clear information, and many patients struggle to understand their medical bills. However, various health care organizations and state-run services are working to create more transparency. By leveraging government databases and a growing amount of crowd-sourced information available on the Internet, patients can gain a clearer understanding of health care costs.
In a recent TEDMED Great Challenges video discussion, a panel of experts explored this topic and shared insights to help patients become more informed about medical care costs.
TEDMED Great Challenges brings together leaders from all disciplines including researchers, doctors, scientists, business executives and technology experts. For this discussion, the panelists included:
Jeanne Pinker, founder of Clear Health Costs, an organization working to increase medical cost transparency
Lisa Maki, CEO and founder of PokitDok, an online marketplace that helps provide the real costs of medical procedures to patients
Amy Edgar, founder of the Children’s Integrated Center for Success and assistant professor of Nursing at Cedar Crest College
Maribeth Shannon, director of the California Health Care Foundation’s Market and Policy Monitor System
Jen Joynt from the California Healthcare Foundation
While discussing discrepancies in health care costs, the panelists emphasized a few points:
- Hospitals are being paid only about 25 percent of what’s being billed.
- It is difficult to figure out what procedures and medical services actually cost versus what is paid for them.
- Because nothing is reported in a clear manner, patients have a difficult time understanding pricing, reimbursement and which part of the bill they are responsible for paying.
- Practitioners often spend valuable treatment time discussing payment options and explaining the “sticker shock” price of a procedure.
- Busy practices may not have the time to explain these issues to patients, who then have to navigate a very confusing financial minefield on their own.
Using Technology to Create Transparency
With the ever-growing amount of information on the Internet, some researchers are using technology to help patients gain a clearer understanding of what they should be paying for medical procedures. For example, www.clearhealthcosts.com hosts a survey of doctors’ costs if the patient chooses to “self-pay” or pay by cash.
- Covers 30 to 35 procedures in seven cities
- Provides a “real” price juxtaposed with the Medicare reimbursement rate
- Uses crowd sourcing as a way to gather large amounts of information from patients
Providing Information on Health Care Costs
Information about health care costs is usually made available in two ways.
- The entrepreneurial approach: A non-government entity provides information collected from patients and doctors. This includes services like PokitDok or Clear Health Costs, which collect information from patients or providers.
- The state solution: Prices are reported to a state-run entity that provides the information to the patient. New Hampshire — and about 15 other states — have health cost databases broken down by insurance, provider, service, co-pay and deductible. Through the information gathered, the database can provide the exact price for a medical procedure. However, these systems may not reflect all the possible options for a patient since the costs are often based on hospital prices.
After one of these reporting systems — or a combination of the two — is in place, a number of challenges remain including:
- Raising public awareness and enthusiasm: Exposing people to accurate information about health care costs can help them recognize value.
- Providing a streamlined solution: It’s critical to make the cost-reporting system as simple and beneficial as possible. By offering systems that do the complicated calculations for patients and highlight their best options, patients will be empowered to take charge of their health.
- Marrying the information: Marrying the financial information with the quality of treatment will help people choose a provider.
Transparency in medicine is of vital importance in the patient advocacy fight, and technology could be a key component the medical industry has been waiting for. Though databases and mobile apps can help improve transparency, education and awareness will continue to be challenging, overarching themes. Part of the problem is that lack of transparency prevents many patients from knowing what a procedure or service should cost versus what they are being charged. Technology can serve as a platform, but transparency and open communication will be key to finding a lasting solution.
MPH@GW, GW’s online public health program, is proud to support the Great Challenges Program at TEDMED, funded by the Robert Wood Johnson Foundation. Through weekly dialogs with TEDMED’s intellectually diverse community, we move toward a more meaningful understanding of the great challenges of health and medicine. Click here to learn more about the Great Challenges Program. To share your ideas, join the discussion at #GreatChallenges.