Major healthcare change is afoot for employed physicians, but chances are you might not have noticed it. The change comes in the form of the Centers for Medicare & Medicaid Services (CMS) price transparency initiative (PTI), which began its four-year rollout in January. The initiative, which was announced in late October 2020, may have sprawling implications for physicians. Chances are you might have missed PTI since you likely were caught up in that pandemic thing at the time. Let’s get you up to speed on how this could affect you. What the heck is PTI? “Hidden healthcare prices have produced a dysfunctional system that serves special interests but leaves patients out in the cold,” said former CMS administrator Seema Verna in an October news release. “Price transparency puts patients in control and supports competition on the basis of cost and quality which can rein in the high cost of care.” The big picture PTI mandates that: By Jan. 1, 2021, hospitals must make prices more transparent. This means hospitals must “post their standard pricing information online in a machine-readable format, updating it at least once a year,” the CMS news release reads. A Turquoise Health report indicates that about 2,000 facilities are in compliance. By Jan. 1, 2022, insurers must provide current and standardized data files, which will include prices. The thinking here is that public access will encourage the private sector to create price-comparison tools and research how prices are set. CMS also hopes public access to the data will better inform patients. By Jan. 1, 2023, insurers must create online shopping tools for consumers. These digital tools will enable them to see negotiated provider-plan rates and estimate out-of-pocket costs for common services and items. By Jan 1, 2024, insurers must expand the online shopping tools to include prices of all remaining services, equipment, drugs, and procedures. The big number 200 million: CMS says these changes will give 200 million Americans real-time prices before they receive treatment. In summary: Health plans and insurers in individual and group markets must provide personalized information on consumer cost-sharing. They must also disclose the actual rates paid to providers. Will PTI work? A Journal of Health Economics study published this month offers some interesting insights. Researchers looked at physician referral patterns and healthcare consumer decisions for lower-limb MRI scans, a common procedure that’s pretty much identical no matter where a patient undergoes it. The one thing that isn’t identical, however, is the price. The researchers determined that patients often pay more than they have to. The median patient in the study had 16 MRI provider options within a half-hour of where they live. On average, they missed six lower-priced options. Moreover, patients in this study had access to a price-comparison tool, but less than 1% used it. Physician referral patterns, the researchers said, are a major driver of consumer decisions in this instance. If patients want to save money, they generally must do some research and break from their physicians’ referral patterns, the researchers concluded. Are doctors trying to saddle patients with bigger bills? Probably not. They have their referral patterns, and patients have the tendency to do what doctors tell them to do. It is true, though (as a recent MarketWatch article points out) that hospital-owned physician practices are sometimes financially incentivized to refer patients to hospital-owned imaging facilities. But as the article suggests, should physicians also need to price shop on behalf of their patients? It seems like another clerical burden added to a heap of clerical burdens for doctors. What will this mean for doctors? In short, likely more work in the interim. We know, not what you wanted to hear, but here’s why: As you know, purchasing healthcare services isn’t like purchasing a commodity, like a new dryer. The dryer is likely a self-contained purchase, perhaps with some installation costs associated. It’s pretty straight forward to price and compare the costs of a dryer. Now, let’s compare that to a hip replacement. With the hip replacement, there are the fees associated with the ortho’s surgical work. There’s also an anesthesiologist to compensate. Plus, hospital fees associated with post-op recovery, pain management, and admittance (if required). Finally, there are recovery costs associated with follow-up visits and physical therapy (if required). Of course, all of this assumes that the procedure goes absolutely by the book with no complications. All of these factors make determining the true cost, and comparing true costs, far more difficult than the dryer. Now, who has to explain all of this to patients? I’ll give you a hint: They’re wearing a white coat and hiding behind their EHR tablet/laptop. There’s a lot riding on the private sector here to come up with intuitive price-comparison features. But until that happens, doctors and other healthcare providers may need to shoulder the explanatory burden. Source
