Transparency in healthcare has become one of the most actively discussed topics today. The major questions have been:
- What should healthcare transparency look like?
- Why does healthcare transparency matter now?
- Why is it important to the consumer?
New Choice Health will address question two in the following article.
Why Does Healthcare Transparency Matter Now?
In a nutshell, patients are assuming greater financial responsibility for their healthcare needs and in turn need information that will allow them to make informed healthcare decisions. This need is amplified by the fact that pricing of healthcare services is highly variable (some refer to it as irrational pricing), within a given market and even within the same hospital, surgery center or freestanding clinic. This has long been an issue for uninsured patients, and is now becoming a significant issue for insured patients as well. Among those covered by employer-sponsored insurance, employee-cost sharing has been growing quickly. Newly insured patients gaining coverage through the state and federal marketplaces mandated by the Affordable Care Act (ACA) are also expected to take on high deductibles with the more popular bronze and silver plan options.
Private healthcare coverage accounts for approximately 60-65% of the population and every day a greater portion of this segment is responsible for the first $2,000-$5,000 in medical costs. As health plans under the ACA increase in prevalence, this trend will accelerate.
- Most of these folks with private healthcare are under the age of 65. Did you know that, for the under 65 year old population, about 80% average less than $2,000 in actual medical expenses per year and most of the rest spend less than $10,000 per year?
- The remaining commercially insured population are still expected to share significantly in the cost, and a 20% coinsurance becoming the norm.
The government currently has 20-25% of the population covered in one program or another. While Medicaid recipients have almost no out-of-pocket expenses, they are shouldering 20% of the cost for roughly the first $10,000 in medical costs.
After private & government healthcare option, approximately 15% are uninsured and are responsible for 100% of their medical expenses.
So, as patients face increased exposure to healthcare costs, they have an urgent need for meaningful and transparent price information. Patients are being asked to act as consumers in a marketplace in which price—a fundamental driver of consumer behavior—is often unknown until after the service they purchase has been performed.
NewChoiceHealth is helping the consumer get informed, engaged and better equipped to collaborate in the decision-making. As consumers become informed and educated on how to participate in the healthcare marketplace they will be more effective, comfortable and able to make better purchasing decisions in collaboration with healthcare professionals. As with any functional marketplace this will be the dominant force in reducing inefficiencies in the healthcare market.
The dynamics of the healthcare marketplace are simply out of balance and the NewChoiceHealth consumer centric solution will continue to be a catalyst in transforming healthcare into a retail marketplace.
Healthcare Transparency Part 3: Why It Is Necessary
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