Providers Must Prepare For Price Transparency Push
By Greg Bengel, contributing writer
In the wake of recent data released by the Center for Medicare and Medicaid Services (CMS), many feel that competing on price is the future for hospitals
A recent editorial in The Boston Globe declares that competing on price is very likely the future for many hospitals. “All in all,” it says, “Americans are becoming more price-conscious consumers of healthcare and want more information.” What does this mean in the short term for healthcare providers and physicians? As healthcare pricing transparency becomes more popular and competing on price becomes more likely, providers need to prepare now to explain their billing practices.
On May 8, CMS released more than 163,072 lines of data from more than 3,000 medical centers nationwide that accept government insured patients. According to CMS, the data was released “as part of the Obama administration’s work to make our healthcare system more affordable and accountable,” and compares the charges for the 100 most common inpatient services and 30 common outpatient services.
Stephen Brill’s TIME article “An End to Medical Billing Secrecy? ” points out that the release of the new data will force providers to explain their practices. “The release of this fire hose of data—which prints out at 17,511 pages—should become a tip sheet for reporters in every American city and town, who can now ask hospitals to explain their pricing,” he says.
The push for pricing transparency will not go away. Earlier this month, the New York Times released an article analyzing U.S. charges for routine procedures with charges from other countries. “It turns out that a more significant factor in the nation’s $2.7 trillion annual healthcare bill may not be the use of extraordinary services, but the high price tag of ordinary ones,” the article states.
What’s more, Mount Sinai Medical Center in Miami is making headlines for vowing to release its price contracts with insurers. The hospital’s CEO, Steve Sonenreich, recently told a radio interviewer, “We’d be willing to put our prices to all the insurance companies out in public and we would welcome that kind of transparency of everyone in the marketplace.”
In the midst of the buzz about price transparency, could Sonenreich’s move create expectations for providers nationwide? Perhaps more than just expectations, it might create incentive. According to the article releasing prices may even give Mount Sinai a competitive advantage. “If we’re able to operate at prices that others in the marketplace are priced 30, 40 percent higher than we are, then we challenge everybody to get to that level where there could be affordable health care in this community,” says Sonenreich.