Harold E. Ford Jr. and William V. Padula
- Harold E. Ford Jr. is a former US Representative from Tennessee who is now President of Rx Saver, a drugstore savings destination.
- William V. Padula is an assistant professor of pharmaceutical and health economics at the School of Pharmacy and a member of the Leonard D. Schaeffer Center for Health Policy and Economics at the University of Southern California.
When the US Centers for Medicare and Medicaid Services introduced Hospital Compare, it created a market of transparency that consumers valued by providing patients with valid information about the quality of hospitals. Patients value this information about the healthcare they consume because it narrows the gap they routinely face as less experienced players in the healthcare system.
Unlike medical providers who handle thousands of similar cases or health insurance companies who manage millions of lives, the patient’s point of reference is often only their own experience.
With this in mind, patients know little about how they can improve their options, outcomes, or satisfaction throughout healthcare delivery, unless essential information is openly available. .
While the demand for transparency has increased among consumers, it has not always been met with an equal supply by some healthcare players. For example, we are not quite sure what exactly goes into the price of a prescription drug or medical device versus an imperfect balance between the costs of marketing, research and development, benefits to society. the health of the technology, or how much goes to pharmacy benefit managers.
Voices of Tennessee
Likewise, health insurance companies offer little transparency to offer consumers informed choices about the benefits they may receive or the costs they may face downstream.
Suppliers don’t give us basic information
Patients who know little about the price or value of the care they consume are less likely to make rational decisions. Although two medical interventions can have different levels of effectiveness, patients often become agnostic about the effectiveness of alternative treatments because there is little difference in price. By this we mean that premiums, co-payments and deductibles often remain constant, giving the patient a poor idea of the value of their investment in health.
While real-time delivery tools that provide greater transparency to the consumer on prices, healthcare benefits and access to particular services and technologies allow patients to understand the added value of healthcare rather than simply the list price.
In addition, patients would have the right information to choose between the health plans that best meet their individual needs.
Improving transparency in healthcare markets is essential to transforming patients into legitimate consumers. By allowing them to carefully consider the decision to stay or switch between health plans based on the selection of the benefits they individually enjoy, we achieve several goals for our company.
How we build a better structure
- We build trust between patients and the healthcare system, to which they often feel disenfranchised.
- We are getting lower prices or a wider range of benefits in health care markets as health insurance companies are in a position to compete with each other for smarter consumer affairs.
- Lower costs to patients of interventions such as prescription drugs could lead to increased medical adherence and lower annual growth in national health spending, results that would benefit all health care stakeholders.
- We improve patient satisfaction by ensuring that patients access the services they need or appreciate. This leads to a more efficient selection of services and technologies that translate into better outcomes, which could potentially reduce unnecessary spending on unwanted or unnecessary health care.
Reducing waste represents enormous potential for the American healthcare system. Previous estimates indicate that health care waste in the United States could range from $ 500 billion to over $ 1.2 trillion per year, which could account for nearly a third of all spending. health.
While cutting unnecessary health care spending is unlikely to be directly repelled by vested interests, it does present a potential conundrum. Healthcare providers and technology makers who depend on revenue at current rates to support their businesses and future innovations would be reluctant to accept potential losses of a third or more.
However, if transparency in benefit coverage could lead to waste reduction and adherence to effective care pathways, innovators would clearly benefit.
On the one hand, the resulting savings on unnecessary spending could be reinvested in innovation and smarter infrastructure that could continually achieve higher levels of healthcare performance improvement. On the flip side, companies whose health techs achieve greater uptake are expected to generate more revenue, but with the caveat that insurance premiums could rise to cover these additional expenses.
Ultimately, improving the transparency of the information available to patients about their health insurance or prescription drug coverage options, combined with reductions in spending for unnecessary care, appears to be a win-win solution. for consumers and the healthcare system.
The challenge will remain as to whether healthcare players take an important step in making more information available to consumers about their offerings, and whether they are ready to compete in a free and open market.
William V. Padula is Assistant Professor of Pharmaceutical and Health Economics at the School of Pharmacy and Fellow of the Leonard D. Schaeffer Center for Health Policy & Economics at the University of Southern California. He is also a director of Monument Analytics, a life science consulting firm.
Harold E. Ford Jr. is a former US Representative from Tennessee who is now President of Rx Saver, a drugstore savings destination.