The Impact of Healthcare Pricing & Transparency on the Rare Disease Community
August 19, 2022 - Written By: Aston Martinez
Imagine this: you’ve just arrived back home from running errands and decide to check the mail, whereupon you find that you’ve received an outrageous bill for your brief visit to the ER recently. Sound familiar? Almost every adult has faced this at some point, whether it be for themselves or a family member, but it can be especially common and distressing among those in the rare disease community.
Why does this happen? What’s being done about it, and what more needs to be done? We’ve made some recent progress in the right direction; however, further examination shows that there’s still much to be done to truly ease this burden across the board.
The Values of Price Transparency
Price transparency allows patients to:
Be much more actively engaged in their healthcare and finances
Compare pricing between various facilities, providers, and insurance coverage plans
Be more prepared for their out-of-pocket healthcare expenses
Hold facilities accountable for their prices and prevent them from adding frivolous fees
For those in the rare disease community, the lack of price transparency further exacerbates an already massive financial strain. According to a study published in the Orphanet Journal of Rare Diseases, yearly direct medical costs for the roughly 25-30 million people currently living with a rare disease amount to approximately $400 billion. That puts the costs for each individual at about 3-5 times higher compared to those without rare diseases.
To make matters worse, rare diseases disproportionately affect children, teens, and young adults. Of the adult population, many are disabled and struggle to work or maintain a solid income. What this ultimately boils down to is that one of the most vulnerable populations is being financially steamrolled by the current healthcare pricing system.
The New Price Transparency Rules
In January of 2021, the Centers for Medicare & Medicaid Services (CMS) implemented a new Price Transparency Rule with clear goals in mind:
“The rule is anticipated to have the potential to reduce the range of prices charged by hospitals such that a net savings would result for payers and consumers from a corresponding reduction in income to hospitals. Price transparency would help to create a healthcare information ecosystem that allows and encourages the healthcare market to tailor products and services to compete for patients, thereby increasing quality, decreasing costs, and helping them live better, healthier lives.”
In order for hospitals to be compliant with this new rule, they must first:
Disclose a list of standard charges for various “shoppable” services.
Make that list publicly available in both a machine-readable file format and a consumer-friendly list derived from that file.
Over a year later, however, there are still many pitfalls and hurdles to getting hospitals to a point of full compliance. Hospitals are still struggling to identify exactly which items and services fall under CMS’ umbrella of “shoppable” services, many don’t have the time or manpower to create the necessary files (let alone make sure they’re truly “consumer friendly”), and some have simply resisted the idea of price transparency altogether.
In July of this year, yet another price transparency ruling was finally implemented, this time targeting price transparency for healthcare insurance coverage. Much like the previous rule required hospitals to do, this year’s rule required the same - a list of services and prices available to their consumers.
Combined, it would seem that these 2 recent rulings have the potential to reshape the financial aspects of the healthcare system. However, it’s important to keep in mind that price transparency is only one piece of the puzzle.
Where Do We Go From Here?
Although these rules are certainly a step in the right direction, it’s not quite enough. Why?
It’s no easy task to boil down all the information about hundreds of medical services and their standard price ranges for the general public, let alone do so in a way that’s accessible to those with various disabilities (e.g. blindness or vision impairments, developmental & intellectual disabilities, or even those who struggle with severe brain fog). While some facilities/insurers may already account for accessibility from the start, others may do just enough to become compliant while failing to take those of us in the disabled community into considerating.
The repercussions for non-compliance aren’t severe enough to motivate hospitals/insurance companies to comply, nor are there any valuable rewards or incentives for compliance. For CMS’ rule, the penalty for non-compliance is only $300 per day, an amount which can easily be covered by one person’s hospital visit in most cases.
Though there may be a decrease in surprise expenses, price transparency won’t do much to bring down the high prices, close the range of price variations, or prevent price fluctuations over time.
Research suggests that placing the sole focus on cost when shopping for healthcare facilities and services can actually backfire. Many would still choose the options with high prices because they associate cost with quality (i.e. they have the capitalism-instilled mindset of “you get what you pay for”).
Cost alone is not enough to determine the quality of care you’ll receive - it would be helpful to also know relevant statistics or hospital goals/action plans relating to relevant services. For example, if a pregnant woman is choosing which facility to give birth at, she would be better able to make that decision if she knew which of them had the lowest C-Section or mother and infant mortality rates, as well as how their maternity ward works to improve those statistics or the ways in which they go above and beyond in their care.
On the flip side of that same coin, many experts worry that being transparent about both the costs and quality of care would embolden the hospitals with more merits and high-quality care statistics to drive their prices even higher - which would subsequently lead to high-quality care being even more inaccessible to lower-income populations than it already is.
Moving forward, it’s important that we continue making strides in restructuring the healthcare system. But for this to truly work, we have to account for every aspect of care with a full 360-degree view that includes costs, care quality, convenience & accessibility, the consumer experience, and (arguably most importantly) the resulting health outcomes.
In the process, it’s absolutely vital that those of us in the rare disease & disabled communities don’t become an afterthought, and are instead actively included and considered in the solutions.
References and Resources
Gordon, D. (2022, July 5). New Healthcare Price Transparency Rule took effect July 1, but it may not help much yet. Forbes. Retrieved from https://www.forbes.com/sites/debgordon/2022/07/03/new-healthcare-price-transparency-rule-took-effect-july-1-but-it-may-not-help-much-yet/?sh=6ce456308e72
Health and Human Services Commission (HHSC) | Centers for Medicare and Medicaid Services (CMS). (2019, November 27). Medicare and Medicaid Programs: CY 2020 Hospital Outpatient PPS Policy Changes and Payment Rates and Ambulatory Surgical Center Payment System Policy Changes and Payment Rates. Price Transparency Requirements for Hospitals To Make Standard Charges Public. Federal Register. Retrieved from https://www.federalregister.gov/d/2019-24931
Tisdale, A., Cutillo, C. M., Nathan, R., Russo, P., Laraway, B., Haendel, M., Nowak, D., Hasche, C., Chan, C.-H., Griese, E., Dawkins, H., Shukla, O., Pearce, D. A., Rutter, J. L., & Pariser, A. R. (2021). The ideas initiative: Pilot study to assess the impact of rare diseases on patients and Healthcare Systems. Orphanet Journal of Rare Diseases, 16(1). https://doi.org/10.1186/s13023-021-02061-3
U.S. Department of Health and Human Services. (2022, March 23). Study suggests people with rare diseases likely face higher health care costs. National Center for Advancing Translational Sciences. Retrieved from https://ncats.nih.gov/news/releases/2021/nih-study-suggests-people-with-rare-diseases-face-significantly-higher-health-care-costs
Vivero, D. (2021, March 3). Industry voices-price transparency alone won't solve the healthcare cost crisis. Fierce Healthcare. Retrieved from https://www.fiercehealthcare.com/hospitals/industry-voices-price-transparency-alone-won-t-solve-healthcare-cost-crisis
Weatherford, E., Gadani, V., & Smith, S. (2020, November 9). The price transparency rule goes into effect January 1, 2021 – is your hospital ready? Healthcare Law Insights. Retrieved from https://www.healthcarelawinsights.com/2020/11/the-price-transparency-rule-goes-into-effect-january-1-2021-is-your-hospital-ready/
Aston Martinez is a writer, community-based activist, and aspiring public speaker. She lives with multiple rare diseases, and she's on a mission to bring more awareness and fairness to the rare disease community. She's also the VP of Content for Habit Nest and has a passion for writing fiction!