What This Means For ConsumersJuly 8, 2020
Hospital prices will be public after all, a result of a federal judge’s decision to reject a legal challenge from the hospital industry that would have rolled back the Trump administration’s Transparency in Coverage rule.
This outcome – and the American Hospital Association’s (AHA) immediate appeal – was predictable and, legal action or not, we were going to get here eventually. As I wrote at the time the lawsuit was originally filed:
“It’s fathomable to believe some federal judge will rule for the hospitals in the short term, but longer term there is no way Congress or the states are going to agree that hospitals have a right to arbitrarily charge patients whatever they want, without first letting them know what those prices are.”
Certainly, this is a victory for consumers. It brings them one step closer to a world in which they will know the price of a hospital service/procedure in advance, rather than weeks or even months after the fact. It also establishes transparency in cost and quality, one of three critical, fundamental steps we need to take to create a market-driven healthcare model that truly puts patients first.
For consumers to not only have access to healthcare that is affordable, safe, and high-quality, there are two other principles the federal government must continue to push.
The first is tying payment to outcomes. This would realign incentives with what consumers want: improved health outcomes at lower cost. The second principle is to establish a competitive market, which ensures that providers constantly strive to keep raising the bar.
LASIK surgery and cosmetic dermatology are two areas of clinical practice that have embraced this model with demonstrable benefit to consumers. As they’re not services traditionally covered by payers, both have had to convince consumers to open their own pocketbooks to pay for them.
The pricing is transparent, outcomes are publicized, and patients can compare providers. This has significantly held down – and even reduced – consumer costs over the years, and is the only part of healthcare that has followed the trend we’ve come to expect in other sectors: Improvements in technology along with increased demand and lower cost, while delivering the same or better outcomes – in a nutshell, improved value.
The industry has for decades fought these essential changes outside this small sliver of the healthcare system. Not everyone – some leading systems are out in front, having grasped the need for change and the long-term competitive advantages that change will bring if they immediately seize it. But for others, there remains little accountability for outcomes, and their model is not patient-centered.
Hospitals have continually cited the…