What does transparency in health care mean?

According to Wikipedia, the word transparency implies openness, communication and accountability . . . performing in such a way that it is easy to see what’s wrong. Sounds like our health care system, doesn’t it? Not really and that’s where enormous opportunity exists to “fix” healthcare.

Why is buying healthcare so much more complicated than anything else we buy? Why can’t we see the cost and quality measures of the services we buy BEFORE we buy them? How can we ask people to make more informed choices without information? The answer is we can’t.

I grew up in a family of health care entrepreneurs and know firsthand the “billing and collection” game that exists between doctors and hospitals (providers) and health insurance companies – I played it.

When providers and health plans negotiate contracts, they create a financial term called a contractual allowance. Simply put, it’s the negotiated difference between the parties for a particular service. Providers bill one fee (higher) and accept a lower negotiated fee, writing off the contractual allowance. What is most curious and frustrating is the variation in cost for the same service between health insurance companies with no discernable difference in quality. See a doctor for a sniffle and get a different price for the same service depending on who you are insured by.

So, what does this mean to the consumer and how does it tie back into the notion of transparency?  As a healthcare consumer, we should be able to see what a service costs in advance of the treatment. We should have access to quality information scored by objective measures and an independent source who maintains the integrity of such information so we can weigh the cost with overall value. Kind of sounds like everything else in life that we buy, doesn’t it?

Legislators, health insurance companies and providers will tell you health care is too complicated and making cost and quality information available to consumers will only confuse them. Insurers resist full transparency because they fear a “race to the top” where lower compensated providers will want their contracts improved. And, depending on their size and sophistication, providers aren’t in a hurry to disclose their negotiated arrangements either. Both parties hide behind “contract law” to protect their business practices.

Ok, so what can we do? Advocate for the principle of transparency and support consumerism, health and wellness. Let’s encourage the health insurers to start small by making the top 25 CPT coded services visible to their membership. Let’s ask them to create tools and resources to help people become smarter, more informed healthcare purchasers.

Can you imagine if all of us behave like consumers with our health care resources? A world where the “new norm” asks us to make informed decisions to avoid unnecessary care, helps us understand that care can be expensive but not necessarily better in value – and supports us in making better choices where we have the ability. I can see it…I hope you can too.