The Affordable Care Act expanded access to health insurance and ushered in a mandate for everyone to have it and for businesses to offer it to their employees. Stratified in metallic tiers, Americans are required to buy insurance or pay a penalty – and for most, the “affordable” plans introduce much higher deductibles. Deductibles are blunt instruments used to lower the cost of health insurance by transferring some of the financial responsibility of healthcare choices to the consumer – and for highly predictable, day to day services, that’s a good thing. The problem is the lack of transparency at the point of care which makes it almost impossible to make an educated and informed choice.

Mark Gaunya

Health insurance is expensive because healthcare is expensive and the cornerstone of healthcare cost and quality reform is transparency. It is a game changer and the rule makers – government, health insurers and providers (hospitals, doctors and pharmaceuticals) – who created the current rules of the healthcare game know it. The current system is built on the principles of secrecy and third-party payment. Insurers negotiate deals with providers to set prices for services and then administer that design through an overly complicated billing/coding system to facilitate payment. It sounds convenient, but somewhere along the way, lost sight of who really needs to be in charge – the American healthcare consumer.

The American healthcare consumer is poised to change the rules of the game by demanding transparency of healthcare cost and quality information. Higher deductibles are forcing them to shop for care and technology is helping them gain access to more information so they can make better decisions. The next step is providing consumers with access to information on quality and cost in advance of treatment so they can determine overall value. Look no further than Lasik eye surgery for proof of this concept. The surgery isn’t covered by insurance and the cost is disclosed upfront and paid for directly by the consumer. Ten years ago, Lasik cost $5000 per eye. Today, it costs $500 per eye and quality has improved dramatically.

Legislators, health insurance companies and providers will tell you healthcare is too complicated and making cost and quality information available to consumers will only confuse them. Government doesn’t acknowledge the massive cost shift it creates by underpaying providers to deliver care who in turn charge private insurers more to make up the difference. Insurers resist transparency because they fear a “race to the top” where lower compensated providers will want their contracts improved. And, depending on their size and sophistication, providers aren’t in a hurry to disclose their negotiated arrangements either. All parties hide behind “contract law” to protect the rules of their game.

"The American healthcare consumer is poised to change the rules of the game by demanding transparency of healthcare cost and quality information."

Making informed healthcare decisions helps us understand that healthcare can be expensive but not necessarily better in value. The principles of transparency, consumerism, health and wellbeing are game changers and will give rise to the American healthcare consumer. These principles turn the rules of the current game upside down by putting the American consumer in charge of their healthcare and I think that’s a good thing that will ultimately make our healthcare system the best in the world.

Register or login for access to this item and much more

All Employee Benefit Adviser content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access