Preston Smith, President of Premier Anesthesia, Shares Takeaways from Health Connect South
October 25, 2023
Recently, I had the privilege of participating in the tenth annual gathering of Health Connect South. With over twelve hundred attendees, this event has evolved into the Southeast’s largest opportunity for the region’s healthcare leaders to collaborate about the latest trends in the health sector, grappling with present-day challenges, and discussing potential remedies.
Amidst the gathering of top-tier healthcare institutions and leaders in the region, I had the honor of serving as the moderator for a panel discussion sponsored by the American College of Healthcare Executives titled “The State of Healthcare: Insights from Industry Leaders on Costs and Transparency.” This engaging conversation featured Ms. Mary Martin, the President and COO of Duke University Hospital, Dr. Deep Shah, a prominent physician executive at Gwinnett Clinic, and Dr. Tom Price, the 23rd Secretary of the US Department of Health and Human Services.
The Complexity of Healthcare Pricing Transparency
The panel, which was certified for continuing education credits for the American College of Healthcare Executives, explored the complicated environment of healthcare pricing transparency. This topic has become a pressing concern for patients, healthcare professionals, and policymakers alike. Conceptually, a free-market with pricing transparency should work together to create an efficient and consumer-friendly healthcare system providing affordable access to quality, patient-driven healthcare. However, as the panel discussed, the reality is far more complex.
The Patient Isn’t the Buyer
One of the fundamental challenges in healthcare pricing transparency is that the patient often isn’t considered the actual buyer and doesn’t understand the pricing model. Instead, numerous intermediaries, including insurance companies and pharmacy benefit managers, are involved in the pricing process and care decisions. This disconnect and misalignment between the consumer/patient, the healthcare provider, and payer can make it challenging for patients to understand the care choices and the associated costs.
Complexity of Healthcare Value Chains
Healthcare and pharmacy value chains are intricate, making it difficult for patients to grasp the full scope of costs associated with their treatment options. Even when patients try to become educated and engaged to make informed decisions, the system’s complexities often thwart their efforts.
Asymmetry of Information
Patients typically don’t know the price of their healthcare service options, and healthcare providers also may not be fully aware of the actual costs involved. This information gap exacerbates the challenge of informed decision-making.
Healthcare pricing is frequently driven by factors other than actual costs, resulting in misaligned incentives. Additionally, the estimates of insurance payers’ allowed charges, coupled with patient responsibility such as co-pays and deductibles, don’t accurately reflect the cost of care, leading to confusion and financial inefficiencies.
Lack of Consumer Mindset
When patients need healthcare due to an acute illness or injury, typically, they are not in the mindset to be savvy consumers. This vulnerability can result in decisions that may not be in their long-term financial or health interests.
Lack of Education
Patients often need more education about the potential short-term and long-term costs associated with their healthcare decisions. This includes understanding the implications of their choices for conditions that require long-term management.
Lack of Clear Correlation between Cost and Quality
Another challenge is the need for a better understanding of choices affecting both cost and quality in healthcare. Patients may assume that higher costs reflect higher quality care, but this is often not the case.
There are some real solutions showing potential.
- Accurate and personalized estimates of care choices: Providing patients personalized estimates for their healthcare costs can empower them to make more informed decisions about their choices for providers, facilities, procedures, and timing.
- Itemized bills: Facilities can improve transparency by publishing estimates of costs by CPT code and by providing itemized bills after the care, which accurately breaks down the costs associated with each aspect of the patient’s treatment.
- Empowerment of patients: Patients will increasingly engage and make the best choices for themselves and their families when their financial responsibility correlates more closely with the actual cost of care, promoting cost-conscious and appropriately tailored decision-making.
A Transparent and Patient-Centric Future
In conclusion, healthcare pricing transparency is a multifaceted issue with significant implications for patients, providers, and the entire healthcare system. Improving transparency should empower patients to make informed decisions with personalized information, accurately breakdown costs, and align financial responsibility with actual expenses.
A patient’s ability to pay for quality care should never be an additional comorbidity. As we navigate these challenges and pursue solutions, our goal at Premier Anesthesia remains clear: a more transparent, efficient, and patient-centric healthcare system for all. Find out more about how we stand behind financial transparency and patient-focused outcomes.