Why Medical Cost Transparency is a Must

Medical cost transparency definition: Known charges (retail rate) and known insurance company negotiated discount payments (claim allowable) beforethe time of service.

Charge: represents the maximum consumer financial risk. It is what the consumer will have to pay when his or her claim is denied by a health insurance company.

Claim allowable: represents what a consumer will pay for a medical care item if his or her deductible has not been met. This is the price tag of care when a medical claim is accepted by a health insurance company.

1) 80% of working Americans have a high deductible. We are consumers of health care and pay for everything out-of-pocket - except an ICU hospital stay.

2) The average high deductible is $5,000.

3) Real cost of deductibles is much higher as health insurance companies deny care daily, resulting in more out-of-pocket expense.

4) Average family household insurance premium is $27,000.

5) 40% increase per year for health insurance is common place, unaffordable and unsusutainable.

6) One million American medical bankruptcies each year - #1 cause of bankruptcy.

7) 75% of those filing for medical bankruptcy do have health insurance but that does not matter when their claims are denied. Now they are stuck with the secret price tags that place them into financial crisis.

8) 60 million Americans struggle to pay their medical bills and have double the credit card debt, about $14,000 on average, than those without medical debt.

9) Health care costs are up 500% since 1995 yet salaries remain flat up only 15% in the same time frame. Every potential salary raise feeds the health care beast and keeps the salary line flat-lined.

10) Capitalism defined: Known pricing creates smart shopping. Known pricing creates competition and with competition the consumer wins every time with lower pricing. Just look at every other sector of the economy.

11) ERISA law. Self-insured employers, government entities and unions have a fiduciary responsibility to manage benefit costs for employees. This is a big liability for such employers now as they have no ability to understand cost drivers and implement a health care cost reduction plan without itemization of medical care costs. For every $1 put into retirement, $2.50 is placed into healthcare per employee. Medical cost transparency is a necessary for self-insured organizations to be in compliance with this federal law.

12) ACA, Public Health Service Act, Section 2718 (e). Bringing Down the Cost of Health Care Coverage. Standard Hospital Charges. Each hospital operating within the United States shall for each year establish (and update) and make public (in accordance with guidelines developed by the Secretary) a list of the hospital’s standard charges for items and services provided by the hospital, including for diagnostic-related groups established under section 1886 (d)(4) of the Social Security Act. Currently, all 5,700 hospitals in the USA are in violation of this federal healthcare law.

Not medical cost transparency definition: false out-of-pocket estimate. Who wrote the pricing contract? Who signed the pricing contract? Who filed the pricing contract? Insurance companies know to the cent what each of us owes but they will not disclose it.

Let’s demand better customer service. Let’s demand medical cost transparency.