When the Centers for Medicare and Medicaid Services (CMS) finalized the hospital transparency rule in November 2019, employers were intrigued about what access to that data could do to help control their health care costs. So, when hospitals agreed in 2020 (after multiple lawsuits) to comply with federal requirements to publish their pricing, employers, insurers and consumers alike held their breath. Health care – a $1 trillion-dollar industry – has become infamous, after all, for its lack of transparency.
Accordingly, when it was reported earlier this year that hundreds of hospitals were intentionally shielding their price lists from Google and other search engines, health care pundits were less shocked than disappointed. Now, the federal government is beginning to enforce these regulations, which should come as good news for employers—especially those with self-insured plans. Access to this information should enable employers to compare prices among hospitals in the same area—providing important data that can drive network and plan negotiations and steer employees to use lower-cost facilities.
And, of course, pricing information can be helpful for consumers who are facing a medical procedure, so they can have a sense of what they can expect to pay and plan accordingly— presuming they can find that information when they look for it. American consumers face another stumbling block to saving money on health care. Half of U.S. consumers don’t understand the basic concepts in their health plans, according to our latest report.
With such low levels of health care literacy, expecting employees to understand and undertake the process of comparing prices and choosing lower-cost options—without support and education—is optimistic at best.
Part One: Improve Employee Health Care Literacy
Because employees too often try to self-educate by going online or asking friends, family or coworkers for guidance, it’s important that employers provide expert resources that know the ins and outs of the company’s plans and can address individual concerns.
Benefits educators can help employees select the benefits package that best suits their situation, starting their health care literacy journey right from open enrollment. Benefits educators can review employees’ specific needs, answer personal questions and educate employees on health care terms and concepts they don’t understand. These one-on-one sessions – in-person or telephonic – will ensure employees choose the benefits and programs that will provide the best coverage for them.
Health care advocates can support employees throughout the year as they seek second opinions, shop for the lowest cost procedures or resolve claims issues. Advocates answer employees’ questions in real time, so they make the most of their coverage and employers get the best return on their benefits investment. Additionally, by leveraging transparency services, advocates can teach employees the art – and importance– of shopping for care. Because the price of services can vary dramatically from one provider to the next, it’s essential that employees get in the habit of comparing costs. Advocates can provide side-by-side cost comparisons for services before employees receive care—demonstrating how the employee can reduce their out-of-pocket costs.
When employees make cost-effective decisions, employers save money, too – so every employer offering health care should have a vested interest in their employees’ health care literacy. Over the course of this year, more regulations are being introduced that will affect employers and plan sponsors – many of which will ramp up in earnest in 2023. With this lead time, employers have the opportunity to make a real difference in cost containment by educating their employees (and their families) now.
Part Two: Take Steps to Improve Health Care Transparency
In addition to empowering employees, employers should take a two-pronged approach to improving health care price transparency: make clear to insurers and hospitals alike that they expect compliance with federal regulations—and prepare to comply with similar and increasingly stringent transparency requirements affecting them directly, beginning next year through 2024.
In an ideal world, employers and providers share a symbiotic relationship. Employers (through their health plans) send business to local hospitals, and in turn, they expect those hospitals to provide cost-effective care to plan participants—and, naturally, to comply with federal and local regulations. By encouraging their workforce to receive care from compliant providers employers can have a direct impact on hospital bottom lines.
The health care industry is in flux – and many of its challenges and complexities may feel out of consumers’ control. The next few years offer an unprecedented opportunity for employers to step up to provide the information and education employees need to take charge of their finances and health. By providing the resources to improve health care literacy at the individual level, and by leveraging power to improve pricing transparency at the local level, employers can begin to edge the industry in the right direction.
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