Hospitals required to post prices publicly under new regulations

Daily CallerThe Centers for Medicare and Medicaid Services (CMS) will require hospitals to update their online price list annually starting Jan. 1, reported The Hill. Before the new rule, CMS required that hospitals share prices with people who requested them.

CMS said the rule was made to “encourage price transparency,” according to The Hill. Administration officials hope the rule will help patients save money and even “encourage them to shop around,” reported the Washington Examiner.

This is a good first step. The problem is that the posted prices will all be absurdly high, because those are the prices charged to uninsured patients as negotiating positions. The insurance companies negotiate lower prices, for their patients only, in return for things like directing patients to that hospital and a guarantee of prompt payment for things most people would otherwise need to take out a loan to pay for. Hospitals don't want to be collection agencies.

The only people who get the real prices are those who come in with cash and are willing to walk out and go somewhere else. They can usually negotiate a cash discount, which is really a "we don't have to file a lot of crap with the insurance company" discount. But the ability to walk out and go elsewhere is key to this negotiation, and can be hard to do when you've just been in a car accident or are unconscious, which is another reason for insurance to act as a negotiating agent in those circumstances.

Publicly posted prices will at least help the people who are in a position to price shop and hopefully begin a competition among providers for that business. And if that happens, insurance companies will use it as leverage to get their prices lower. Medical providers know this and will try to avoid starting the price war. But if the law requires them to post their prices publicly, someone will have an incentive to lower them.

I hesitate to call this brilliant. It's probably fair to call it a good start.

This entry was published Wed Aug 08 09:48:31 CDT 2018 by TriggerFinger and last updated 2018-08-07 13:21:00.0. [Tweet]

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