DAni Yuengling, a 35-year-old from South Carolina, had a family history of fatal breast cancer. So when she noticed a lump in one of her breasts, she immediately made an appointment with her doctor. Although her biopsy was covered by insurance, she still had to pay $5,169 out of pocket.
If she hadn’t used her insurance, Yuengling would have saved $3,000.
This story is far too common. Insurers don’t negotiate the best deals and patients waste money paying for treatments that their insurers “cover”.
The reduction in the price of health care has long baffled politicians. As election season draws to a close, politicians will need to move beyond their campaign talking points on health care reform and start working to implement ideas to help people like Yuengling.
That’s why we designed for the Cicero Institute the Patient’s Right to Savings Act: a policy to ensure that insured persons know the best cash price that will be accepted for care and are not penalized. by their insurer for saving money with a cash-based option. It also gives the sickest people a financial incentive when they seek care via a cheaper cash option to help offset high out-of-pocket expenses. These measures can reduce unnecessary spending by up to 40% by rewarding people who buy at the best prices without sacrificing quality.
Pricing transparency has been a central concern of bipartisan health care reformers for decades. Thanks to federal regulations established by the previous administration, it is easier to discover prices from hospitals and insurers. But transparency alone will not create a robust market. Massachusetts was the first state to require full price transparency in 2012, but since most patient bills are set by insurance companies, they rarely use it.
People should be rewarded for using price transparency data and deserve the right to choose the best provider. We offer three simple steps to restore functionality to the healthcare marketplace and get people to use price transparency data.
First, all health care providers and systems should publish spot prices. By doing so, they can save money on insurance paperwork, get paid immediately – rather than 60 to 120 days later – and pass some of those savings on to patients. Being able to see published spot prices gives patients price certainty, which is a major concern when seeking care; uncertainty is a big reason why many skip necessary care.
Second, patients should receive credit for their deductible (the amount they pay before insurance kicks in) if they choose lower-cost cash providers. Insurers currently only give deductible credit for in-network fares, which can cost more, as was the case with Dani. This reform would allow patients to jump the wall of their insurer’s network if it blocks access to cheaper care.
Third, insurers should share any post-deductible savings 50/50 with the patient who identified and chose the least expensive care. Currently, those collecting their deductible have little incentive to find a lower-cost treatment option since they only pay a small percentage of the bill.
Today, if a patient shops around and saves their insurance company $10,000 after reaching their deductible, the patient does not directly benefit. Instead, those savings are spread over each enrollee in that health plan. There is no incentive to take the time to seek out lower-cost care, so most stick with expensive care. It’s like going to a restaurant for dinner, and once you learn that the bill is shared equally by everyone, you order a more expensive dish.
With the Patient’s Right to Save Act, someone who saved their insurer $10,000 would see an immediate payout of $5,000, greatly increasing their incentive to shop to save while lowering premiums for all participants. on a diet.
Apps and websites could even help patients like Dani Yuengling find the best deals and get paid when they save the user money. Companies as diverse as GoodRx, Healthcare Bluebook, HealthSparq, MediBid, Sesame, TALON, Trim, Turquoise Health and Zelis’ Sapphire Digital would all be well positioned to find good deals for patients.
Under the Patient’s Right to Save Act, individuals will have price certainty before treatment and will be rewarded for using that information to get the best deal. Doctors will compete on price and quality and reduce heavy administrative burdens. Insurers will see their costs drop and can reward customers who actively manage their own costs. Patients with pre-existing conditions or chronic illnesses will benefit the most as they often have many expensive medical bills.
High-cost health care providers and systems that have managed to stay in-network for most health plans and reap high profits will likely oppose this reform. But since patient outcomes often have little correlation with the cost of care, many decision-makers will decide that such opposition does not outweigh the possibility of reducing costs without sacrificing patient care.
Health care price inflation continues to overwhelm businesses and families, hurting the economy and personal health. While health care price transparency is one of the few areas where Democrats and Republicans agree, transparency can only cope with rising prices when people use it.
Dani Yuengling needed to know if the lump she found in her breast was benign or cancerous. With the Patient’s Right to Save Act, she would have known in advance the exact price of her ultrasound-guided biopsy and would have saved over $3,000, which could have been redirected to paying for housing or to help offset the bite of inflation. Policymakers should seize the opportunity to unleash the power of price transparency with the Patient’s Right to Savings Act, which not only gives patients price information before they seek care, but also rewards those who find the best deals.
Jonathan Wolfson is legal director and policy director at the Cicero Institute, where Josh Archambault is a senior fellow. Wolfson previously headed the US Department of Labor’s policy office.