Hawaii physician: Why price transparency efforts are 'bound to backfire'

In a commentary piece for investigative website Honolulu Civil Beat, a Hawaii physician argues that recent federal price transparency efforts won't significantly lower healthcare costs.

An executive order signed by President Donald Trump in June aims to lower healthcare costs by improving price transparency. It directs governmental agencies to set rules requiring disclosure of discounted rates hospitals and insurance companies negotiate for care. It also addresses transparency regarding patients' out-of-pocket costs for medical services.

But Kathleen Kozak, MD, an internal medicine physician at Honolulu-based Straub Clinic and Hospital, was skeptical in terms of how far the executive order can move the needle.

"This [effort] is supposed to help patients make more cost-conscious choices when it comes to healthcare. After all, if you want to do a cosmetic procedure, which is not covered by insurance, your surgeon can give you an exact price for the services. It would make sense that the same could be done for covered medical procedures as well," she wrote.

"Will this work? Or will it result in higher prices for care, the exact opposite of what's intended? Time will tell, but it seems like the plan to lower prices is bound to backfire," she added.

Dr. Kozak went on to explain her view, noting that hospitals that learn they have lower reimbursement from an insurer compared to another facility will likely demand higher payment from the insurer, which she said will affect patients via higher premiums.

She also argued that knowing the cost of hospital care won't necessarily influence a patient's decision when that patient has limited options as far as where to access care, and that insurance companies may also decide to pay a hospital less if they see another insurance company can pay a hospital a lower amount for the same care.

Read Dr. Kozak's full commentary piece here.

 

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