Unlocking Business Growth through Healthcare Price Transparency

 

Maximizing Revenue and Patient Trust with Transparent Healthcare Pricing

 

Healthcare Price Transparency: A Business Imperative for Market Competitiveness

 

Healthcare price transparency has long exceeded the relationship between the service provider and its final consumer. Legislation is being passed at the state and national levels, and patients are becoming more vocal about what they want to see and understand about pricing. During 2020 - 2022, additional laws were passed to reduce the cost of services from private and public clinics. This was done not only to create healthy competition but also to lower prices throughout the United States and provide Americans with access to affordable and high-quality healthcare.

 

When creating AllClinics, we focused on this problem precisely because medical care is a basic benefit that should be available to everyone, and unreasonably high prices should not prevent it.

 

The Need for Price Transparency In US Medicine And Legislative Framework

 

A lack of pricing transparency always hinders patients' ability to make informed decisions about their health, often resulting in unexpected and burdensome medical bills. The American healthcare delivery system has no common denominator for medical care services. At the same time, everything is shrouded not only in the personal secrecy of individual clinic pricing but also in many bureaucratic aspects that only exacerbate the gap between patients and specialists. Thus, the transformation of the healthcare sector should begin by providing transparent prices for medical services.

 

The right approach to pricing will impact not only patient out-of-pocket costs but also health insurance and coverage prices. According to the Kaiser Family Foundation 2021 Employer Health Benefits Survey, since 2007, family insurance premiums have increased by 55 %, and by 2021, the average annual family health insurance premium was $22,221. These figures also do not have a clear definition and decoding for each dollar paid, which means businesses also lose large sums on medical services.

 

While much of the discussion about federal price transparency rules primarily focuses on disclosing negotiated rates between payers and providers, some provisions promote transparency for consumers:

 

   
• Requires payers to provide consumers with cost estimates initially for a select set of procedures and, beginning in January 2024, for all types of medical care.

   
• Encourage and create the conditions for launching a savings program for participants with expensive care decisions, such as direct cash payments or a deduction of a certain coefficient for further savings.

 

 

Thus, the problems in US healthcare today include a number of problems:

 

   
• Variation in prices for services in public and private clinics without a direct connection with the quality of service delivery;

   
• The impossibility of detecting problems in medical care due to the lack of qualitative assessment beyond cost;

   
• There needs to be a unified database of private and public general practice clinics with prices for all services and insurance.

 

 

The US government has already introduced several rules to improve price transparency. Key among them is the Centers for Medicare and Medicaid Services (CMS) Coverage Transparency Rule, which took effect July 1, 2022. This rule requires insurers to disclose negotiated service rates and publish that data in a machine-readable format. Similarly, hospitals are required to provide clear and accessible pricing information, including standard charges for services.

 

Aligning US Healthcare Costs and Quality Through Price Transparency

 

Price transparency for medical services can help address two factors affecting the price-quality ratio: eliminating asymmetries in tariff information (through price disclosure) and consumer access to quality services with maximum convenience (through the creation of portals that take into account prices and assess the quality of services with the ability to search for alternatives).

 

Some statistics on how exactly patients find out the cost of medical services today:

 

 

The key pain point for most healthcare consumers in the US today is the enormous difference in costs for the same healthcare services across the country. The difference can be as much as 40–50 percent within one US statistical region:

 

 

From an economic point of view, this means that there is a clear need to negotiate commercial rates between healthcare organizations and the consumer. Especially with annual commercial claims costs totaling approximately $1.1 trillion, every 1% change in commercial claims rates results in an increase or decrease in national medical reimbursement costs of approximately $11 billion.

 

Healthcare Price Transparency Solutions And Their Importance

 

It can be said that price transparency may not be enough to fully transform the US healthcare market, but it certainly provides a huge start to change the relationship between the parties. At the moment, all available resources with prices are inferior and incomplete. This is what prompted us to create a unique product that would defend the side of the consumer. This information can also help employers make cuts to support employees, as well as help core businesses analyze market and strategic value when assessing potential growth opportunities.

 

This begs the logical question: why was such a solution not created earlier? First of all, due to technical complexity. There are approximately 6,120 hospitals in the United States, including private and public institutions. Among them, 5,129 are community hospitals, including 2,987 not-for-profit hospitals, 1,219 for-profit hospitals, and 923 state and local government hospitals. In addition, there are 207 federal government hospitals and 125 other specialty facilities. A complex and powerful algorithm is required to process such a quantity of information; we used data science and machine learning to pull this information from open sources, process it, and create a single database, which subsequently selects the most suitable option for the user based on their request and filtering.

 

Another difficulty is the unscrupulousness of service providers, who may provide incorrect or partial information about the services. Despite federal laws, some suppliers still argue that price disclosure could negatively impact their competitiveness. It is important to understand that the final impression of the client is influenced by many factors, including:

 

 

Another issue that should be given attention is the healthcare sector itself. From a business point of view, transparency increases trust, loyalty, and involvement of patients. Even a price increase in the future may leave the audience loyal to a medical facility. Hospitals will require investments in optimizing processes and adapting to new market conditions, including potential temporary profit drawdowns.

 

Ultimately, this ensures compliance with US laws and proper patient care. It also encourages hospitals to optimize their internal and external software for process automation, improving both treatment quality and service efficiency.

 

Conclusions

 

The trend of pricing transparency in healthcare will continue to increase, with greater support at the legislative level. Benefits include empowering patients, promoting competition, and helping control costs. Implementing this transformation requires overcoming challenges related to data complexity and vendor compliance. The healthcare industry must prioritize transparency to build a more efficient and fair system.

 

We are confident that AllClinics will significantly influence transparency policies and contribute to the transformation of healthcare. By providing complete and high-quality medical care relevant to its cost, healthcare is moving toward client-oriented, progressive, and reputation-focused practices.