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Whose Job Is It to Make Prices Clear for Patients?

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Health care transparency is aimed toward improving patient decision-making. Some patient leaders believe price transparency would allow patients to make educated and informed decisions, as well as lower out-of-pocket expenses. But the conversation about price transparency is complicated. At the very least, it is raising further questions on how effective price transparency is on lowering costs. One professor of health law and policy at Boston University does not think that price transparency would lower costs or help patients and instead believes “asking patients to … make decisions about diagnosis and treatment in light of information about price and quality [is] … a waste of time, and worse, it poses radically unfair burdens on many patients.” 

Dr. Alexander Lakowsky, internal medicine, and Dr. Jonathan Kaplan, plastic surgery, are physician entrepreneurs who are proactively teaching and educating patients and colleagues on the intricacies of health care. They both believe price transparency allows patients to take more responsibility in their health care decisions in addition to lowering costs. 

For example, if a patient is able to immediately see the price difference between an outpatient CT scan versus an inpatient CT scan, a patient will most likely choose the cheaper option possibly influencing market prices. A scan will have the same results no matter where it is done, so there is no relationship between price and quality.

However, can price transparency become a little more complicated with procedures such as surgeries that depend on skill, knowledge, and experience of the surgeon and team? Is there now a relationship between costs and quality? 

Dr. Lakowsky states that there is no evidence indicating that more expensive services equate to better quality of service. “The way health care is set up, with stringent guidelines and credentialing, whether seeing a doctor in a rural town in Colorado or in New York City, the patient should be receiving the same quality of care.” For example, a surgery within a hospital versus the same surgery as an outpatient will have different prices, but the quality remains the same, and if that information is known, Dr. Lakowsky believes that patients would opt for the cheaper option. 

How Doctors Are Using Social Media to Teach Patients, Increasing Transparency

Maybe there is a perceived relationship between price and quality. So, how can a patient evaluate the quality of their procedure? 

Dr. Kaplan has been using social media to increase transparency within his own practice. On Instagram, he posts videos of the different procedures he completes, which allows patients to not only see the procedure but also gives patients an idea of the confidence and skill of the surgeon. In addition, he directs his patients toward websites that assign physicians a grade based upon their outcomes data, complication rates, and patient reviews. Using social media allows patients to become more invested and responsible with their care. In addition, Dr. Kaplan has also seen an increase in on-time collections when prices of the services he offers are available and in patient-friendly form (not CPT codes). 

Who Should Take the Initiative for Price Transparency?

Dr. Lakowsky firmly believes it is the responsibility of physicians to educate and guide their patients on medical costs. However, he also believes that many physicians are not familiar enough with the business administration side of health care to educate their patients appropriately; so, he provides physician education and training related to the business side of health care. 

He states that in order for patients to understand their health care, they only have two options: physicians and insurance companies. He believes that it will be to the greatest benefit of independent physicians to educate their patients on costs, as patients will most often opt for the outpatient (cheaper) option versus inpatient (more expensive), especially with patients having high deductible insurance plans – thus providing more business for independent physicians. 

As an independent physician himself, when Dr. Lakowsky refers a patient for other services, he also provides the patient with information on local practices, including their locations, costs, and hospital affiliations; and information on insurance, especially for high deductible insurance plans, which may lead to more out-of-pocket costs for patients opting for procedures done in the hospital versus as an outpatient procedure.

With physicians taking the initiative to educate their patients and patients taking more responsibility with their own health care decisions, perhaps health care transparency can be within reach, resulting in fewer surprise hospital bills.

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