On the surface, the price transparency required by TIC is a good thing - it's a step towards health consumerism. However, it falls short on two major fronts. Learn about them in this blog.
Consumerism is the present and future state of healthcare.
Think about it: when searching for a hairdresser, restaurant, or skin care product, people have access to extensive information about the price and quality of different service providers, locations, and products. People want the same access to price and quality information when it comes to healthcare.
The shift towards health consumerism began roughly 20 years ago. With a goal of improving healthcare price transparency, the recently implemented Transparency in Coverage (TIC) rule is a direct result of push for health consumerism.
TIC requires group health plans and health insurance issuers in the group and individual markets to disclose price and cost-sharing information to participants, beneficiaries, and enrollees. In short, TIC gives consumers the tools they need to access price information before they receive care.
On the surface, the price transparency required by TIC is a good thing. It’s a step towards health consumerism. However, it falls short on two major fronts.
Shortcomings of price transparency regulations
First, TIC falsely assumes price transparency will make healthcare more affordable for plans and consumers. Studies have shown price transparency alone can actually increase healthcare delivery costs. Many consumers falsely equate high cost with high quality and low cost with low quality. As a result, they often choose more expensive providers or facilities when less expensive options may provide a similar quality of care. This false assumption is expensive for the consumer andtheir health plan.
Second, TIC does not address or require health plans or insurers to provide information on healthcare quality. Like when shopping for anything else, consumers want access to both price and quality information. And for good reason; it’s the pairing of healthcare price with healthcare quality information that has the potential to reduce healthcare delivery costs.
Health plan sponsors who can provide healthcare price and healthcare quality transparency have a tremendous opportunity to help save their members, and themselves, money.
Healthcare price transparency
Understanding the true cost of healthcare is difficult. Healthcare charges, or prices, are not fixed in the same way as consumer goods or other services.
For example, consider a consumer who has a skin rash they want examined by a dermatologist. Their employer offers two types of health plans – PPO and POS. This consumer chose the POS plan because it had lower premiums but they aren’t really sure how it works. So, they google “best dermatologist near me” and schedule an appointment. They go and believe everything is covered under their health plan because the office staff told them the dermatologist was “in network.” A few weeks pass and they receive their explanation of benefits in the mail and learn nothing was covered by their health plan. They are responsible for the full cost of the dermatologist visit. The consumer is upset and complains to their HR representative.
What’s more is that healthcare costs can vary immensely, even for the same service under the same insurance plan. Healthcare price transparency demystifies how healthcare costs are calculated. It helps consumers understand the true cost of care upfront so they aren’t confused and don’t have any unexpected expenses.
TIC only addresses healthcare cost transparency. It does not address healthcare quality transparency which is equally important for making informed health decisions.
Healthcare quality transparency
The World Health Organization defines quality of care as “the degree to which health services for individuals and populations increase the likelihood of desired health outcomes.” The definition further explains quality healthcare should be: effective, safe, people-centered, timely, equitable, integrated, and efficient.
Healthcare quality transparency, then, gives consumers the tools they need to assess quality before they receive care.
There is currently no regulation that requires health plans to provide quality transparency, and people are forced to turn to tools like Google Reviews for an attempt at understanding whether a certain doctor is a good one. However, doctor review sites like Google Reviews or Healthgrades rely on consumer-generated content that is entirely subjective in nature, not reflecting a data-driven, validated approach to the evaluation of healthcare quality.
How to provide price transparency and quality transparency
To help their clients comply with TIC, many administrative services only (ASO) insurance carriers or third party administrators (TPAs) will provide cost transparency solutions for plan sponsors. However, they are not required to, and may not be able to, provide objective quality transparency that is specific to your health plan.
That’s where Amino Health comes in.
Amino’s digital healthcare guidance platform gives members everything they need to make informed health decisions. This includes healthcare price transparency and healthcare quality transparency information that is specific to your health plan and network providers.
By using Amino, members become more aware of - and engaged with - the benefits available to them, and they have access to a more intuitive way to find and book in-network, cost-effective, high-quality healthcare.
We’re your partner in healthcare cost and healthcare quality transparency, driving members toward the best healthcare outcomes while lowering healthcare spend for you and your members alike.
Ready to learn more?
Join us on Wednesday, June 15th for a roundtable discussion with two leaders in healthcare price transparency, Eric Hargan and Randy Pate, to learn more about the requirements.
