In a System Mired in Regulatory Requirements, Price Transparency is Key to Cost Reduction
PORTSMOUTH, N.H. (PRWEB) June 11, 2018 -- While many of us have heard about the substantial burden of regulatory costs on our hospital systems, many are ignorant of how compliance with these regulatory requirements drives up the overall cost of healthcare in the U.S. Compliance costs billions each year in a system that’s already overburdened by exorbitant premiums, deductibles, and fees. While many of these requirements, mandated at both federal and state levels, are important to patient safety, indigent care and proper outcomes, healthcare consumers, including employers offering health insurance benefits to employees, are largely unaware that these types of costs impact their premiums directly while also driving up out-of-pocket costs. American healthcare consumers can take back control over their healthcare spending by shopping, not through added legislation, says industry leader MyMedicalShopper.
Mark Galvin, CEO of MyMedicalShopper, says, “The healthcare system is bloated by requirements which are tremendously expensive to comply with and which most consumers are unaware of. When applied to procedures that don’t require this level of governmental oversight, these hidden costs drive spending up for everyone, including consumers and third-party payers. Healthcare price transparency is key to reducing healthcare costs. When consumers knowledgeably select services based on price, quality, and convenience, they tend to navigate to the best facilities for proper care at the lowest regulatory costs. The key is to know what you will have to pay before you have the services performed.”
Rising inflation rates are no match for soaring healthcare costs. In 2016, American businesses and taxpayers spent over $3.3 trillion on healthcare, equaling 17.9% of the country’s gross domestic product (GDP).(1) While much of this spending is attributed to prescription drug costs and care for chronic illnesses, the administrative burden for hospital facilities is also steadily increasing.
Healthcare providers and facilities must comply with over 600 separate regulatory requirements as part of efforts to promote both patient and provider safety and well-being.(2) Regulatory burden costs $1,200 every time a patient is admitted to a hospital. (3)
When a patient ends up using hospital facilities when unnecessary, the extra money consumed to help meet regulatory requirements has no direct impact on that patient’s care. Ultimately, healthcare consumers—including employers providing coverage to employees—are stuck absorbing these unnecessary costs. This means higher premiums, as well as surprises on medical bills. Most employers are unaware that their healthcare premiums are based on the medical payments made by their insurance policy plus the insurance company’s operating and profit margins. The money paid on behalf of consumers, or employees, gets added together annually and a 15-20% margin gets added on top, roughly, to arrive at their next year’s premium. When costs continue to inflate, premiums go up which represents increased revenues and gross profit. Keeping healthcare pricing complex means certain entities will keep making more money as the cost of care continues to rise.
Ultimately—consumers and employers are making the payments for the care—and regulations and legislation just gives coverage for obscure pricing. Support tools creating price transparency can increase consumer awareness of these fees and other expenses associated with medical care. Price transparency applications ultimately allow consumers to pick their care options with the knowledge they need in order to only pay for the care they need from the best facilities and providers that align with those needs.
Meanwhile, lawmakers in Colorado have filed legislation which would require providers to publish their fees for common healthcare services.(5) But while Americans suffer through the waiting game, companies such as MyMedicalShopper already offer medical price transparency tools to help healthcare consumers shop around for the best value for the medical services they need. These tools provide easily accessible information about the true cost of medical services in any geographical area, allowing consumers to comparison shop to get the best bang for their buck. Savvy employers offer this solution as a way to empower employees to make informed decisions about their healthcare.
“Hospitals will always be more expensive. People should simply not go there unless that's where they need to go,” Galvin explained. “Price transparency tools empower the consumer to determine the optimum place for their care.”
Until legislation forces price transparency nationwide—if it ever will—employers and individuals can start to take back control of their healthcare spending by utilizing price transparency tools that expose the actual amounts paid and allow them to compare the actual costs of local healthcare services.
About MYMEDICALSHOPPER:
MMS Analytics, Inc., dba MyMedicalShopperTM, is a big data company with big dreams for healthcare. Co-founder and CEO Mark Galvin started the company out of the need to provide consumers and companies who provide healthcare benefits to their employees with transparency—the leverage needed to make solid decisions on their healthcare and improve their quality of life. Consumers previously ignorant of price variations in procedures and testing utilize real-time health insurance plan pricing information that makes it possible to choose care based on price, quality and convenience. Experts document that as much as $1 trillion could be slashed annually from the cost of healthcare in the U.S. through careful shopping. MyMedicalShopper’s goal is to transform the healthcare industry into a fair market for consumers. For more information, visit http://www.MyMedicalShopper.com
Sources:
1. The Rising Cost of Health Care by Year and Its Causes. The Balance. https://www.thebalance.com/causes-of-rising-healthcare-costs-4064878
2. Understanding the True Costs of Healthcare Regulatory Compliance. HealthcareSource Blog. http://education.healthcaresource.com/healthcare-regulatory-compliance-cost/
3. Regulatory Overload Report. American Hospital Association. https://www.aha.org/guidesreports/2017-11-03-regulatory-overload-report
4. Hospitals, Systems Spend $39B Annually on Regulatory Compliance. RevCycle Intelligence. https://revcycleintelligence.com/news/hospitals-systems-spend-39b-annually-on-regulatory-compliance
5. Price transparency would benefit health consumers. NewsOK. https://newsok.com/article/5593932/price-transparency-would-benefit-health-consumers
Karla Jo Helms, JoTo PR, http://www.jotopr.com, +1 727-777-4621, [email protected]
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