Advantages of Price Transparency in Healthcare

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There are several advantages of transparency to both hospital and consumers. The
insurers and employers can steer the beneficiaries to low cost sites. With the increasing
investment in price comparison tools, the employers are also able to offer incentives to their
beneficiaries of patients if they prefer the traditional care with the low cost alternatives. For
example the Castlight Health with price comparison method topped the revenue
of $13 million. It also was successful in accelerating the interest of the
consumers in the price comparison capabilities. With the increase in
transparency the consumer search cost is reduced which will help them to
seek the low priced provider (Wu et al., 2014). Moreover, the providers can also
gain confidence in revenue streams with the fast claims processing and real-time
information about consumer’s eligibility for coverage. The confidence is required in the revenue
streams that are must to offer the offer the lowest possible prices. It will help reduce prices
by increase in the competition in health care market. With the higher cost
sharing and provision of the quality information, the price transparency
efforts will help in greater economic efficiency (Christensen, Floyd & Maffett,
2017). The other advantage of being transparent with regards to price is the
reimbursement to the hospital. Increasing transparency and revenue
increases the economic efficiency. It has been found advantageous as the
consumers can make the informed health care choices. It is a strong method
to attract the price-sensitive customers and preserve the loyalty (Bai &
Anderson, 2016).
There is an effective policy recommended for the meaningful price
transparency. For instance one can develop customized price estimate