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Will Healthcare Transparency Help Me Save Money?

1 min read

30 sec brief

President Trump’s recent executive order to compel hospitals to provide patients with cost estimates before care would seemingly help households better manage their ever-growing health care costs. The logical line of thinking is that lifting the veil of price secrecy will allow consumers to comparison shop for the best deal, which in turn will force…

President Trump’s recent executive order to compel hospitals to provide patients with cost estimates before care would seemingly help households better manage their ever-growing health care costs.

The logical line of thinking is that lifting the veil of price secrecy will allow consumers to comparison shop for the best deal, which in turn will force healthcare providers to be more competitive.

But that might not be how it plays out.

For starters, while the price of care is a key shopping tool for basic commodities—gas for the car, the car itself – we aren’t necessarily looking for the least expensive healthcare option. Quality is a concern. You ask your doctor for the best referral to a specialist, not the cheapest, right? The Journal of the American Medical Association published a study in 2016 that found employees are given access to a  price-comparison tool rarely used the tool, and spending increased. 

Moreover, some economists suggest there could be an unintended consequence of health-care transparency. Providers will be able to do the same price comparison. While the anticipated notion is that price transparency would drive down costs through competition, it could cause a medical care provider that finds it has the lowest prices in a city for a given procedure to raise its prices. 

That said, there are clear wins for better transparency. None more important than telling us ahead of treatment whether any person involved in our care will be out-of-network. We’re well trained to pick primary doctors, surgeons, and other specialists that are in-network, but the behind-the-scenes providers who support those doctors –such as radiologists and anesthesiologist—are typically chosen by our primary doc, and may not be in-network. That leads to nasty “surprise bills” as the insurer requires the patient to pay a great portion of out-of-network charges.

Disclaimer: the content presented in this article are for informational purposes only, and is not, and must not be considered tax, investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, including fund prospectuses, and consult with appropriate tax, investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.

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