Legislative action on drug pricing is not only an industry hot-topic, it’s a campaign trail talking point. And all signs point to legislative action in the very near future. In a new PM360 piece, our own Meg Alexander breaks down some of the leading policy proposals – and what they could mean for industry.
And look out for our teammates Peter Pitts, Meg Alexander and Michelle Leeds at BIO International this week in Philadelphia. Peter will be speaking on Who’s Getting Funded in the Biopharma Industry – and Where the Money is Going!
The problem with transparency
Like many in the industry, we’ve been holding our breath for the rumored executive order on increasing transparency in healthcare costs, which was initially expected this week. Spoiler alert: it hasn’t happened yet.
Still, it got us thinking a lot about transparency initiatives around costs (e.g. hospital bills, drug prices) and what is – or isn’t – making an impact with patients.
If a healthcare cost transparency tool is developed, but no one uses it, does it make an impact?
Study after study suggests that Americans are craving more transparency from corporations. Yet, recent research calls into question what actually happens when people are given tools to achieve more transparency. For example:
- About 70,500 families in a study were given access to the Truven Treatment Cost Calculator to help them access information about healthcare costs and make informed decisions. During the study period, only 11% of participants used the tool and only 1% used it 3 or more times.
- In a Kaiser Family Foundation survey of adults with employer-sponsored health insurance, just 23% of respondents reported using an online tool to research the cost of different healthcare providers. Only 17% attempted to shop around at different providers to find the best price.
This research suggests that, even when transparency tools are available, many don’t know the tools exists, where to find them or how to use them. Others simply choose not to use the tools.
Transparency is only part of the equation.
Many well-intended policymakers may rationalize that if patients have more information about costs, they can “shop around” for care, thus incentivizing companies and institutions to price competitively. However, this overlooks two core issues in our healthcare system: limited choice and healthcare literacy.
Patient choice is often limited. While transparency tools might empower patients to “shop around,” patients may only have a few – or even just one – option that works for them. Patients likely can’t control the insurance company their employer chooses. They may find that there is just one medicine that is best suited for their condition. And, they may be unable to travel geographically to get care at a lower-cost hospital.
Selecting healthcare services isn’t like ordering at a restaurant. “Pricing Menus” that reflect the cost of care for certain services or therapies are inherently flawed. They assume patients know exactly which services they require and are aware of the add-on services associated with a major procedure (e.g. follow-up care, rehabilitation, etc). Menus commonly rely on list prices, which may not accurately reflect the different prices a patient might pay based on their insurance.
Our take: Only time will tell if healthcare cost transparency will see legislative action. Regardless, it’s critical for the industry to understand what transparency tools can help achieve, and where limitations lie.
Who wrote this? The managing editors of TWTW are Dana Davis, who is pleased about summer weather, but not the start of “office winter,” and Randi Kahn, who is looking forward to her first outdoor concert of the season next week. Syneos Health Communications' Reputation & Risk Management Practice is a team of healthcare communications consultants, policy-shapers and crisis response specialists. We provide unique solutions to the evolving communications challenges in today’s healthcare industry, using evidence-based approaches to help our clients successfully navigate the most sensitive of situations.
Got thoughts? Contact Dana
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