Todd A. Nelson
Vice President, Finance and CFO
Grinnell Regional Medical Center
When the call for “price transparency” came to America’s hospitals, shouldn’t it have also gone to the supplier community as well?
Imagine a world where cost information is kept from patients, physicians, boards of directors, auditors, insurance payors, and consultants. Imagine a world where you cannot share certain financial performance information with those same constituents to get advice. Imagine a world where you must negotiate a contract in a vacuum, without benchmarking information, or legal assistance. Imagine a world where language printed on an invoice, different from a negotiated contract, creates a binding contract if paid by your organization.
That world may be closer than we think.
Suppliers are beginning to place confidentiality clause language in their contracts. The clause prevents hospitals from discussing details of a contract with anyone--unless the supplier, at their sole discretion provides prior written authority to release that information. That means you can’t tell your patient what the product cost. You can’t tell the physician what it cost. You can’t tell your board of directors the terms of an agreement. You can’t even share the information with an insurance payor to get a better rate on your procedures. It is illegal to tell a consultant engaged in negotiating contracts on your behalf. And, finally, you would need prior written consent for your auditors to review your files for an audit.
What if all suppliers took this approach to claiming their pricing information is confidential and your hospital doesn’t own its purchase price data? Who’s next to be sued? The local audit firm for looking at invoices during a routine audit? The insurance company for requesting a copy of implant invoices to verify pass through pricing? The hospital for providing information to better manage their chargemaster?
Hospitals aren’t asking to be able to share confidential contract information with the hospital down the street. Nor are we asking to share it with the supplier’s competitors. At the end of the day we just want to be able to do business as usual, get a fair deal from the insurance payor, and know whether we’re getting a good deal when we negotiate a contract. Is that too much to ask?
Call your senator or representative and get them to look into this issue. After all, the federal government is picking up the tab on the majority of healthcare purchases. Without cost information, and the ability to get a fair deal, how much more will taxpayers spend on healthcare? Not to mention the fact that hospitals can’t be transparent with their prices if they can’t share information regarding what they paid from suppliers with their patients.
