A kid sitting with books of healthcare information
Employee Benefits

Data, Information, and Healthcare Price Transparency

Ed Oleksiak
Ed Oleksiak
Sr. Vice President, Employee Benefits

Despite an election year’s numbing impact on regulatory and legislative healthcare change, one issue that could move forward in 2020 is “healthcare price transparency.”

On June 24, 2019, President Trump issued Executive Order 13877 directing federal agencies to increase healthcare price and quality transparency. The order directs federal agencies to require hospital disclosure of negotiated rates in a form “understandable” by patients. The definition of “understandable” could depend on whether you graduated from medical school or are a 19-year-old fresh out of high school.

On November 15, 2019, the Centers for Medicare & Medicaid Services (CMS) issued the Hospital Transparency Final Rule. The final rule requires hospitals to provide patients with clear, accessible information about their “standard charges” through the use of standardized data elements. You could probably have a multi-day debate about what is a “standard charge.”

Finally, in November 2019, the Transparency in Coverage Proposed Rules were released, which will allow consumers to shop and compare costs of health insurance (including providing paper copies within two business days without charging an additional fee). Can you imagine telling Amazon they have to provide purchasers with a paper copy of the sales slip with each transaction? If that was the case, I doubt we would have had $258 billion or 5 percent of all retails sales in 2018 via Amazon.

What Is the Difference between Data and Information?

While the concept of healthcare price transparency is a noble concept (and one I agree with), we have to make sure we provide consumers with information and not just data.

Let me explain. Early in my career as a “mainframe” computer programmer (long before laptops, iPads, and cell phones), my boss at the time taught me a very valuable lesson. Rather than simply taking the manual paper version of a process and automating it with a computer, let’s look at the process, improve it, and make it more usable for the end-user. We accomplished the improvements by asking the end-user what they could use to do their job more accurately and faster.

A great example would be the early versions of street mapping software. The early software simply put MAPSCO online. No value was added other than turning a paper book with maps into an online version you could print out, thus providing data but not really information.

Fast forward to today where we have Waze, which allows drivers to know how long it will take them to get to their location, provides faster alternate routes, and notifies them of accidents and radar traps. That is “information.”

The Rush to Healthcare Price Transparency

My fear in our rush to healthcare price transparency is that we will provide consumers with data and not information. Technology can (given time and the opportunity to ask the consumer what they want) provide the consumer with information that will help them make informed healthcare purchasing decisions.

Providing data dumps of healthcare prices in the name of transparency will not work and will only delay the development of real consumer tools that provide information. Transparency may be required to lift the veil off of pricing so that app-based tools can be created, or we use tools like SimplePay Health that could transform the healthcare purchasing experience and allow consumers to make educated decisions for themselves and their loved ones. I hope transparency results in consumer information and not just data.

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