Commentary: Shouldn’t healthcare consumers enjoy transparency the way customers do?

In an age steeped in technical specifications, user reviews, and critical evaluations of products and services of all types, doesn't it strike you as odd that the healthcare consumer—the buyer of some of the costliest of modern society's most essential services—can't easily compare prices between competitors, outcomes across providers, or reviews from fellow healthcare consumers?

Whatever the rationale may be for a lack of transparency in healthcare, no amount of short-term gains will be worth it in the long run. The consumerization of online merchandise began in the 1990s with, the consumerization of transportation began seven years ago with Uber, and the consumerization of lodging began eight years ago with AirBNB. The consumerization of healthcare is under way—and it's here to stay.

Healthcare transparency: The players

To establish the status of transparency in healthcare, let's first take a look at the positions of its players.

• Consumers. Deductibles and out-of-pocket premiums have steadily climbed for employees, with a 69 percent increase for family coverage between 2004 to 2014, according to the Kaiser Family Foundation/Health Research & Educational Trust 2014 Employer Health Benefits Survey. Increased cost-sharing means that, more than ever, consumers want to know precisely what they're paying for. And with an endless supply of stories in the mainstream media of how similar medical services are routinely being "priced five or 10 times more at one facility than at another down the street, for no apparent reason," it shouldn't come as a surprise that healthcare consumers are becoming increasingly vigilant about wanting access to this information. They are, after all, among a new breed of consumer, most of whom are survivors of a recession that showed them the importance of finding the best value, and virtually all of whom are savvy enough to make use of the resources that will help them discover it.

• Payers. Similarly, many payers want transparency because studies show that "if the healthcare market reacts to price transparency in the same way as other markets, then increasing the transparency of price information available to consumers will improve competition and drive down prices." That approach could mean cost savings for payers, which could help slow the trend of rising deductibles and out-of-pocket premiums.

• Providers. As a report by the Healthcare Financial Management Association points out, whether it's due to a hospital's/health system's concerns about the accuracy of the services information provided by clinicians, providers neglecting to supply information about the services to be provided to the hospital, or the simple fact that providers are often hesitant to talk dollars with patients, many providers do not want transparency. (Interestingly, this flies in the face of the findings of the Health Care Cost Institute, which noted last year that the pricing gap tends to close—and average costs increase—in markets where pricing is transparent.)

How this happened and what must happen next

In recent years, healthcare reform has focused on digitizing records, EMR and meaningful use, rather than the patient. There's been more emphasis on billing systems than on engagement systems. Had we focused on engaging the patient, the patient would have forced the establishment of a truly value-based system that includes transparency.

The model as it exists today is not sustainable nor desirable. New models must focus on appropriately incentivizing providers without betraying consumers.

To do that, technology must be leveraged that embraces the transparency that consumers today expect from all of their buying experiences. When they ask, "Is this the right treatment for me? What are the out-of-pocket costs? How can I be sure my provider is making the recommendations that are right for me?", clear and accurate answers must be readily available.

Embrace consumerization as a strategy

The consumerization of healthcare will continue to gain momentum, and the implications are pretty obvious. Providers who embrace the reality that the healthcare world is changing—just as the worlds of other industries have already changed—are already a step ahead. Providers who are resistant to price transparency will need to evolve in order to thrive in this new emerging environment. The healthcare market as a whole must shun price opacity and embrace the opportunities that the consumerization of healthcare creates. Costs must be supported by evidence-based data that provide reasonable assurances about specific outcomes. If the players in the current healthcare system don't embrace these changes, they will be permanently disrupted by a new wave of competitors who do embrace consumerization as a strategy, recognize the business advantages of rationalizing their numbers, and capitalize on the modern consumer's appetite for finding the best value, if not the lowest price.

David Bennett is the executive vice president of product and strategy at Orion Health, which delivers open-data technology solutions to drive interoperability, population health management and precision medicine.

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