#360 Transparency in Health Care Costs

Transparency

Can we make Health Care costs more transparent and can they ultimately impact markets? There is an initiative coming up right now derived by the Department of Health and Human Services. They’re in a what-you-call “case and comment period” about whether we can make Health Care costs more transparent for the consumer and therefore give them more of a choice. Why would that ultimately be helpful for markets? First, Health Care costs, for most American businesses, are the second largest cost component behind their payroll. Secondly, they have been the highest growth cost category both this year, and, for a number of years. It is an issue that both the consumer and Corporate America are struggling to control. We have illustrated a “cost triangle” in the video to show you the dynamics which include patients, insurance companies, hospital and doctors. There’s nothing wrong with the way that that this triangle has evolved and it’s almost comparable to airline pricing in a way in that there are a lot of components that go into it which are very difficult to compare. I know you’ve probably all received bills from Health Care providers. A lot of these agreements inside the triangle over the years have not been very easy for the consumer to compare. The Department of Health and Human Services is simply trying to make this triangle and the cost comparison much easier for the consumer to compare, much like other products. We feel like if that can be accomplished, and of course it’ll be difficult, we could see some positive action. If somehow we can make these Health Care costs more transparent we could potentially see some good market activity.

 

Ashley Page, JD, MBA
Senior Vice President
Wealth Consultant
Email Ashley Page here

 

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