by Katherine Restrepo
Director of Health Care Policy, John Locke Foundation
In my newsletter this week, I talk about the growing prevalence of surprise medical billing, or when patients are unexpectedly charged for out-of-network services that are 20-40 times higher than the going in-network rate.
Many states have passed laws that remove the patient from a surprise bill situation and leave the payment dispute to be sorted out between the out-of-network provider and the patient’s insurance company. Other states require that patients only pay for in-network cost-sharing if they are unexpectedly billed by an outside network provider, while the insurer pays the difference. Some laws also place limits on how much insurers pay outside providers.
These policies certainly have good intentions, but removing patients from billing discrepancies is a barrier to gaining more consumer control in the health care space. The issue with surprise billing points to the health care industry’s biggest problem – lack of price transparency.
In places where price transparency does exist, there are no surprise bills. That’s because patients know how much their surgery will cost before they go under the knife.
This is exactly how the Surgery Center of Oklahoma (SCO) operates. SCO has completely opted out of insurance contracts and offers cash pricing for various elective procedures. Just as it’s proven to save uninsured and insured patients, it’s also extremely valuable for employers who are at-risk for most of their employee’s health care claims. Because SCO prices are lower than their competitors, it’s not unusual for out-of-state employers to pay for their employee’s travel expenses in addition to the cost of their outpatient procedure.
Imagine if more health care settings worked directly for patients, not insurance companies. Patients would have more leverage over the quality of health care and its cost because the people who are delivering health care would only thrive based on patient satisfaction. Such a drastic transition would, in fact, make for a true marketplace in health care, and ‘surprise billing’ wouldn’t be the problem that it’s become today.
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