Let’s Be Clear
I consider myself to be an approachable guy. I certainly hope people sense that about me. I’m pretty open with my thoughts and experiences, and I think it helps to create a culture where everyone feels comfortable sharing ideas and making recommendations. When we welcome personal transparency into a business setting, those there are likely to get on the same page and feel more compelled to contribute to the greater good. Knowledge grows when people are open and up-front. Everyone involved can see more clearly what needs to be done and how they fit into the strategies.
My appreciation for transparency goes beyond open conversations at our conference room table. In fact, I see transparency as a guidepost for the direction our industry needs to head – or at least the probable path to getting a handle on the rising claim costs we’re all facing. It’s pretty simple really. When costs are clear up-front, they can be better managed. Carriers can better evaluate the risk each group brings to determine the right rate for coverage and make smart decisions when managing claims and creating their networks and formularies. Employees can make informed decisions when choosing among care options and become better shoppers of services. And employers can feel confident that they can continue to provide employee benefits without breaking the bank because costs are being contained. The more price transparency becomes the norm, the more price reform can improve the trends we see in the market.
To make gauging appropriate prices easier, reference-based pricing is growing in popularity nationally. It’s helping to limit the amount paid for certain medical services by controlling costs at the source. Putting a reference on cost ahead of procedures can help plan sponsors and members make cost-effective decisions about treatment options within their health plans. There is a good bit of education required, however, so plan administrators have to be prepared to put in the work to see the results.
Certainly, there also is a strong need for further transparency in pharmaceutical pricing as options expand and costs escalate. Pharmaceutical companies defend their astronomical charges based on the cost of research and development, but very few drug prices are broken down to show the details of each item that makes up the net cost after rebate. If disclosure of each element of a pharmaceutical’s price could be clear, the information could lead to a demand for fairer pricing and put a lens on value for life-saving medications or cures. As it stands, some plans respond to cost hikes by revising their formularies and restricting use of certain medications.
The way I see it, there is no simple cure for overcoming this rising claims trend we are faced with in the foreseeable future, but one thing is crystal clear, knowledge and awareness can bring about change. Be informed. Know what we’re up against. Share information. Transparency gives us the ability to make educated decisions that can bring together fair pricing with quality treatment options.