The United States has taken an important step in reducing the cost of health care by mandating price transparency. Unfortunately, people are not incentivized to care about the actual cost of health care under the current system of insurance and care plans. This lack of incentive is one of the major reasons why the cost of health care has risen to its current height. People are allowed to focus solely on the price of their deductible, copay, and out-of-pocket maximum for their insurance instead of the actual cost of care. However, focusing on these things doesn’t change the price of their care or the fact that someone needs to pay it in full. Let’s discuss the effect this has on people who require care.
There are typically two types of people who use the health care system, those who avoid the system until they need it, and those who rely on it regularly. Both types of people are relatively insensitive to the actual cost of their health care.
Those who avoid it until they need it usually have very little experience with the health care system, and typically only rely on it for emergencies. They may have little knowledge of how it works and what everything costs, but prices are of little concern to most people in an emergency. These people focus on insurance premiums, deductibles, and their copay rather than the actual price of the emergency care they’ll receive, and they rarely will (or can) shop around for the best price.
Those who rely on the health care system regularly are people who need care for extended periods of time or have chronic illnesses. These people have much more experience with the health care system but are still relatively insensitive to the actual price of their care. This is because instead of focusing on the price of care, they only have to focus on their deductibles and the out-of-pocket maximum of their insurance plan. After paying the out-of-pocket maximum, their care is paid for entirely by their insurance for a period of time.
In both cases, the health care system doesn’t incentivize people to care about what the actual cost of care will be. Price transparency can be very helpful for people (mostly those who fall somewhere between the two types of people described above), but it can only go so far in helping the problem. Creating coordinated health systems that stop the fragmentation of care for chronically ill patients can drastically reduce the actual cost of care for each patient. In addition to this, proper preventative care can reduce the overall cost of care for those who avoid the health care system.
Houston Healthcare Initiative (HHI) is an organization of physicians and other medical professionals that is actively trying to fix this problem by increasing coordination, being transparent about our pricing, and much more. Contact HHI today for more information.