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Clueless on Health Care Costs?

David P. Lind BenchmarkEver try to figure out what your health care providers actually get paid?

I didn’t think so. As a patient, you probably check to make sure that the doctors, hospital and pharmacy are considered “covered” by your insurance plan. Why? That keeps your out-of-pocket expenses down because of discounts your health plan negotiated with these providers.

But as patients/consumers, we’re clueless about the negotiated discounts with any given health care provider. We’re out of the loop. Discounts are negotiated privately between insurance companies and health care providers. They’re not posted anywhere, and no one is required to share that information.

But here’s the rub for you, the employer:

Negotiated discounts can vary greatly between insurance companies and will affect your underlying costs.  So which carrier has the deepest discounts?

Competition between insurance companies for pricing purposes is a good thing, but the level of competition needs to be transparent to employees and patients for market forces in health care to flourish—and eventually hold costs down.

True market forces are hindered by the current confidential pricing process.

Enter Consumer Driven Health Plans. Under this concept, an employer allocates a sum of money annually to offset employees’ portions of a high-deductible plan (health savings accounts are part of a consumer-driven plan). Employees are motivated to get the best health care deal they can find.

That’s good, but consumers are most effective when they understand the true cost of a given product or service BEFORE the purchase is made. Encouraging employees to become better consumers is not enough if they don’t know the true cost and value they receive.

We are far from a patient-centered market in health care. This needs to change—and until it does, we as consumers, will be kept in the dark.

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