Employers Can Lead on Price Transparency Reforms

The Asheville Citizen-Times ran an op-ed by Liz Button, co-founder of the Asheville, North Carolina restaurant Cúrate, discussing how employers can address runaway healthcare costs for their businesses and employees by pursuing price transparent healthcare options. Liz explains she’s cut her healthcare costs by roughly 40 percent via price transparency and how recent actions by the Biden administration and North Carolina’s Attorney General will help other businesses follow her lead. PRA has collected numerous stories of employers who have also saved 30 to 50 percent on their healthcare costs through price transparency.

Liz concludes with a call to action for employers to take the same creative approach that’s allowed them to succeed in business to their healthcare benefits. She writes:

My business and employees struggled for years to contend with inflated healthcare costs. Under the American healthcare system where prices generally aren’t known before care, we were left at the mercy of providers free to charge whatever they deemed appropriate post-treatment. 

We recently overcame this enormous healthcare burden by pursuing an innovative, price-transparent benefit design. We incorporated Direct Primary Care (DPC), which offers our employees unlimited access to physicians who cover the vast majority of their healthcare needs at the modest bi-weekly cost of $14.  

DPC providers also identify cash-based providers for imaging, specialists, pharmaceuticals, and surgery. Eliminating layers of bureaucracy associated with claims processing in favor of upfront prices generate steep discounts of approximately 40 percent. The imaging center we contract with offers us MRIs for $600 versus around $2,500 under our previous healthcare arrangement. We partner with an independent pharmacy to obtain prescription drugs at wholesale prices and with home delivery for 20 percent less than our previous arrangement.   

For more serious healthcare needs, we have a self-funded medical plan managed by a transparent and non-conflicted third-party administrator (TPA) and insurance adviser who work together in the best interest of our employees to identify high-quality, low-cost medical services. The financial certainty associated with price transparency allows us to budget and provides peace of mind that we won't have massive healthcare cost overruns.   

In our experience, the biggest barrier to identifying high-value healthcare and limiting spiraling healthcare costs is the persistent lack of clear prices. Healthcare is the only economic sector where prices generally aren't known until after service is provided. Yet, this bizarre pricing dynamic is changing. Starting this year, a new federal rule took effect requiring hospitals to disclose their actual prices, including their discounted cash and contracted insurance rates, empowering consumers with the information needed to shop for quality care at competitive prices.   

Unfortunately, most hospitals are not yet complying with this mandate. In June, North Carolina Attorney General Josh Stein sent a letter to state hospital administrators requesting explanations for how they're following the rule. And this month, President Biden issued an executive order calling on the Department of Health and Human Services (HHS) to enforce it. HHS subsequently announced plans to significantly raise the financial penalties on hospitals violating the rule and continuing to hide their prices. These actions can increase price disclosures and allow more employers to take actionable steps to reduce their healthcare costs as we have.  

To make it through the pandemic, small businesses have had to be creative and innovative. Employers can adopt this same mindset to overcome the epidemic of runaway healthcare prices to the benefit of their business and employees.

Read the full op-ed in the Asheville Citizen-Times HERE.