Analyzing Healthcare Cost Transparency: Regulation and Policy

This discussion board post delves into the advantages of cost transparency in healthcare for both hospitals and consumers, highlighting how it can steer beneficiaries to low-cost sites and reduce consumer search costs. It emphasizes the importance of transparency in fostering competition and economic efficiency within the healthcare market. The post also recommends policies for meaningful price transparency, including the development of customized price estimate websites and government involvement in promoting digital, cloud-based tools. Furthermore, it suggests strengthening all-payer claims databases, enacting Medicare data disclosure guidelines, and establishing mandatory disclosure of patient outcomes data. The discussion concludes by advocating for simplified payment models and value-based insurance design to better align payer and patient incentives, ultimately improving the effectiveness of price transparency on patients’ treatment and insurance purchasing decisions. Desklib offers a variety of similar solved assignments and resources for students.

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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

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website. It will help the customers to read about the special discounts as well
as schedule the online appointments. It will help imaging provider to
safeguard the pipeline of the patients (Carman et al., 2016). The policy
formulation in this regard is suggested both at federal and state level. It is
also suggested that the government should involve the private market
involvement, in the movement of price transparency. There is need of
greater investment in the digital, cloud-based private market tools. It is recommended to the
government to establish and strengthen the all-payer claims databases. It is suggested to the
federal policy makers to enact the Medicare data disclosure guidelines to support the market-
based healthcare price transparency reforms. It is further recommended to establish the
mandatory disclosure of patient outcomes data in addition to the price information to depict the
cost effectiveness. There must be removal of the restrictive gag clauses in the contracts. The
government must formulate the policy to simplify the payment models especially for patients
with the high deductible insurance plans. It is suggested to better align the payers’ and patients’
incentives with the help of the value-based insurance design. It will help to nudge patients to
higher value care. The hospitals must be mandated to provide additional resources to determine
the effectiveness of the price transparency on patients’ treatment. It will facilitate the
effectiveness in insurance purchasing decision (Mortimer, 2014).

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References
Bai, G., & Anderson, G. F. (2016). US hospitals are still using chargemaster markups to
maximize revenues. Health Affairs, 35(9), 1658-1664.
Carman, K. L., Maurer, M., Mangrum, R., Yang, M., Ginsburg, M., Sofaer, S., ... & Siegel, J.
(2016). Understanding an informed public’s views on the role of evidence in making
health care decisions. Health Affairs, 35(4), 566-574.
Christensen, H., Floyd, E., & Maffett, M. (2017). The effects of charge-price transparency
regulation on prices in the healthcare industry.
Mortimer, L. (2014). Price Transparency in American Healthcare: Public Policies to Support
Market-Based Solutions.
Wu, S. J., Sylwestrzak, G., Shah, C., & DeVries, A. (2014). Price transparency for MRIs
increased use of less costly providers and triggered provider competition. Health
Affairs, 33(8), 1391-1398.