Many employers feel like they're grasping at straws when it comes to lowering
The Hospital Price Transparency Final Rule and the Transparency In Coverage Final Rule, effective in 2021 and 2022 respectfully, require hospitals to publish previously private rates for their services. Transparency In Coverage specifically reveals negotiated rates between hospitals and carriers across in-network providers. This means employers, especially those with self-funded plans, can pinpoint which providers and hospitals will give them the most
"It's a really powerful data set where we can see both the rates that the hospitals are putting forward as well as the payers," says Shay Forbes, head of employer solutions at Turquoise Health. "But anytime there's a new data source, there is some skepticism."
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In Forbes' experience, employers are hesitant to abandon their typical method for evaluating provider networks, namely examining claims data. However, it's only fair to point out that price transparency data is still only a few years old, and the data itself can be extremely hard to read.
"Put yourself in the shoes of a benefits team; we've got a lot of different responsibilities on our plate," says Forbes. "Unless you're a really large employer, you don't typically have a data scientist on your team that can then take all of this raw data and utilize it."
While Forbes is hopeful that these transparency rules will better enforce standardized data formatting from hospitals down the road, he doesn't think employers should wait for the data to become more accessible. Whether that means bringing on data experts, looking to platforms like Turquoise for guidance or moving around priorities for your benefits team, Forbes encourages employers to dig into the data and see where they're losing money.
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For example, employers could use the data to see the reimbursement rates for a big procedure like giving birth in New York City. By examining the data, Turquoise can tell us that complex vaginal delivery at "Hospital A" costs anywhere between $21,057 to $30,199, depending on the plan carrier. Aetna was on the lowest end of the range, while UnitedHealthcare was at the top. This at least informs the employer what they're losing or gaining with their current plan — it can also give them more negotiating power. If employers know which hospitals and which plans are overcharging them, they can avoid them or renegotiate with the carriers and brokers for a better deal.
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Turquoise found that 59% of hospitals in the U.S. had multiple negotiated rates for the same vaginal delivery procedure, highlighting just how variable healthcare pricing can be even in the same location. Forbes reminds employers that they are responsible for getting their employees the best care possible, and they can't do that without price transparency data.
"As a self-funded plan sponsor, you're responsible for making sure your members have affordable health plans," says Forbes. "That ultimately entails shopping for the best possible network that meets the needs of your population from both an access and geography standpoint as well as pricing."
