Controlling Skyrocketing Medical Pricing

A federal medical pricing transparency rule went into effect two years ago, meant to address an all-too-common issue that Americans face. How often have you heard of a friend going to the hospital only to experience the worst kind of sticker shock when they receive the bill in the mail afterwards? Maybe you’ve experienced this yourself. Many see the importance of the care that they received and simply accept the cost they are being charged without question. It’s true, after all, the care that they are receiving is important and carries great value. But what determines the value of a medical service?

The opacity surrounding medical pricing has contributed to those prices spiraling out of control, saddling 100 million Americans with medical debt as a result. The federal pricing transparency tool was meant to solve this by holding hospitals accountable to display their prices, which would allow consumers to make the decision that works best for them and their family. The problem is that the price transparency rule is not being enforced. There is widespread hospital noncompliance, with a recent study showing that only 16% of hospitals nationwide are complying. To date, the government-run Centers for Medicare and Medicaid Services has only fined two hospitals out of the thousands nationwide that are violating the rule. Unfortunately, most hospitals are willfully ignoring the rule so they can continue profiteering off their patients.

Lack of Enforcement Leads to Accelerating Costs

According to a recent op-ed published in Fortune by Cynthia Fisher the founder, of PatientRightsAdvocate.org, the Labor Department recently announced health insurance costs increased by more than 20% over last year, nearly three times the overall inflation rate. And experts are predicting the costs to accelerate even faster next year. At one California hospital, the price of a C-section ranges from $6,200 to $60,600. A recent study published in the journal Radiology finds CT scan prices can vary from $134 to $4,065 at the same hospital.

This keeps healthcare consumers, including employers, from shopping for the best quality of care at the lowest possible price. When medical pricing is transparent, who would tolerate paying 10 times more than the patient in the bed next to them? Through choice and competition, we can substantially reduce our healthcare costs.

Employers, who provide most Americans with health coverage, can steer their employees to less expensive alternatives. An SEIU Union representing 200,000 building services workers recently dropped NewYork-Presbyterian from its health plan. The hospital was charging its members an average of $10,368 for outpatient colonoscopies. They compared this to $2,185 at the city’s public hospitals. That union saved roughly $30 million.

What Can We Do?

We have seen enforcement work. Both of the penalized hospitals quickly became compliant and posted exemplary pricing files. The new Congress can make the rule work as intended by passing legislation to hold hospitals accountable for hiding their prices from the American consumer.

Another issue is that many hospitals post estimates instead of actual prices. For instance, a patient in South Carolina received a $1,800 estimate from a local hospital for a breast biopsy. But her actual bill was $8,424. Johns Hopkins University research shows that top American hospitals charge an average of seven times their cost of care. The No Surprises Act requires that all providers provide a good faith estimate of expected charges to any uninsured or self-pay patients upon request, which takes into account any expected discounts. Since Solidarity Members are not insured, this consumer protection applies to all of our Members. We recommend asking for a “good faith estimate” by name any time that you are scheduling a medical service.

We are all paying too high a price for this broken system. Medicare rates should be the benchmark for hospitals and must be designed to be fair. Ultimately, however, Congress will need to act to require hospitals to comply with the law and post their actual prices.

Transparency Benefits Solidarity Members

Medical pricing transparency is the answer to controlling healthcare costs. A large part of our mission is to control escalating healthcare costs by providing transparent billing. Members must know how much and for what they are paying. We believe enhanced medical pricing transparency in healthcare in general and for all healthcare sharing ministries builds even greater trust with our own Members, prospective members, and the public in general.  We keep costs down by negotiating fair, transparent, and reasonable pricing based off the benchmark of Medicare rates. This practice, called Reference Based Pricing, offers the greatest savings possible.

We firmly believe in advocating for our Members and stewarding their sharing dollars. Our Reference Based Pricing process is pushing back against the unethical billing practices across the country. Using this process, we were able to save our Members 67% off their combined medical bills in 2020. Our healthcare system is gravely ill, and patients are the ones that are paying the price. We are committed to offering Members access to top quality healthcare at a far lower cost – and without compromising our Members’ ethical values.