In what’s being hailed as an “unprecedented move” for the health care industry, three major insurance companies have agreed to publish their prices online starting next year. Aetna, Humana, and UnitedHealthcare are participating in the new online portal, and additional insurers may end up following suit.
Why does that matter? Well, health care prices are notoriously difficult for patients to figure out. Not even experts have mastered this area. For instance, in 2012, a health policy reporter wanted to figure out what her doctor-recommended MRI cost — and even she struggled to navigate the complicated process.
To make matters worse, prices currently vary widely among different hospitals for no good reason. In the most extreme cases, prices can fluctuate by over $100,000 for the same exact type of procedure. Without being able to shop around for the best health care prices — like Americans typically do with other goods and services — people often end up at unnecessarily expensive hospitals that aren’t actually providing them with a better quality of care. Experts agree that ends up driving up the cost of health care overall, since hospitals aren’t being required to keep their prices competitive.
The three insurers who are agreeing to publish their prices are taking a step forward to fix these issues. The companies are partnering with a nonprofit group, the Health Care Cost Institute, to get the new online portal up and running by 2015.
“Consumers, employers and regulatory agencies will now have a single source of consistent, transparent health care information based on the most reliable data available, including actual costs, which only insurers currently have,” the executive director of the Health Care Cost Institute, David Newman, said in a statement. “Voluntarily making this information available will be of immeasurable value to consumers and other health system participants as they seek to manage the cost and quality of care.”
When it’s more clear exactly what health services cost, doctors are less likely to recommend expensive and unnecessary tests and procedures. Likewise, patients may turn them down if they know the price tag.
The Obama administration has made greater price transparency one of the goals of health care reform, hoping that it will eventually help keep costs down throughout the industry. Last year, the Center for Medicare and Medicaid Services (CMS) released data on what hospitals charge for common procedures. The administration also recently published the amount of money paid to doctors through Medicare for the first time.
The are other ways that the health law may help make progress in this area, too. By extending coverage to Americans who were previously uninsured, Obamacare intends to eventually cut down on hospitals’ uncompensated care — one of the reasons the American Hospital Association says it’s necessary to charge such inflated prices in the first place.