Hey, GOP: Run on transparency in healthcare – Pacific Research Institute

Hey, GOP: Run on transparency in healthcare

Republicans have concluded their national convention without offering a detailed policy plan for the next four years. Instead, they have stuck with their 2016 platform and offered seven bullet points outlining their priorities when it comes to healthcare.

Among those seven are promises to reduce health insurance premiums and end surprise medical bills. They can accomplish both by insisting on transparency from both providers and insurers.

The price of medical care is shrouded in secrecy. Healthcare providers may charge different insurers different amounts. Those who pay in cash may get a discount or pay more because they don’t have an insurer negotiating on their behalf.

Thanks to this convoluted system, people can expect a nearly 300% difference between the lowest and highest sticker prices for individual healthcare services. Requiring providers to be transparent about their pricing could allow average patients to shop around for the highest-value care. Such consumerism would result in lower prices and higher quality, just as it does for every other good and service in our market economy.

President Trump signed an executive order mandating price transparency from insurers and hospitals in 2019. The ideas in that order should be codified into law. Transparency is the simplest way to tackle things like surprise bills. These bills typically arise when patients seek care from an in-network provider, only to learn afterward that some party who participated in their care, say, an anesthesiologist or a laboratory, was outside their insurer’s network. That provider then bills the patient for the difference between what his or her insurer is obligated to pay and the provider’s list price for the service.

One in 5 patients reports getting a surprise bill after elective surgery, according to a study from the Journal of the American Medical Association. Some policymakers want to eliminate surprise bills by dictating out-of-network reimbursement rates, while others want to send these billing disputes to arbitration. Neither approach is sensible.

Instead, lawmakers should require insurers to provide accurate information about whether a provider is in-network, and a hospital should not be able to declare itself “in-network” if individual providers who work there refuse to participate in that insurer’s network. In cases of emergencies, when patients are unable to choose a provider, lawmakers should ban surprise billing outright.

If the GOP is serious about lowering health costs and improving outcomes, it would be wise to put transparency at the center of its policy program.

Sally C. Pipes is president, CEO, and Thomas W. Smith fellow in Health Care Policy at the Pacific Research Institute. Her latest book is False Premise, False Promise: The Disastrous Reality of Medicare for All (Encounter 2020). Follow her on Twitter @sallypipes.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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