As patients take on an increasing share of their healthcare costs, many are watching, and sometimes holding back on, their out-of-pocket expenditures for items such as prescription drugs, which have continued to see rising prices in 2017. Drug prices are expected to increase by 9.9 percent this year, exceeding the anticipated increase in cost of living
One of the main causes of frustration among consumers is in their inability to see a clear rationale for why prices are rising and what exactly they are paying for. This lack of transparency in health care is alarming and needs to be addressed by providers, insurers, employers, government officials, and consumers.
With the changing climate in healthcare policy, price transparency has come to the forefront as people consider how to manage their medical spending. Price transparency can help drive down healthcare costs in by increasing pressure on providers to control costs and ensure that patients receive the highest quality of care possible for the price they pay.
Pressure on Providers
Knowledge is power, and the power of informed healthcare consumers is tremendous. A patient’s out-of-pocket cost is a deciding factor on which provider they will see and what care they may receive. As more consumers begin to seek out this information, healthcare providers will face increased pressure to remain competitive without compromising quality. For example, the steep and steady price increase imposed by Mylan NV for the EpiPen was met with public outcry in summer 2016. In response, the manufacturer offered a lower-priced alternative to the drug, announcing the availability of the forthcoming drug late that August. This pressure on manufacturers from the patient population extended to providers, who now had to consider this lower cost option to recommend and prescribe to patients who were looking for one.
Specialty drug pricing is another major pain point for patients. These are drugs that are very expensive due to being for a very specific, low-demand “specialty” condition such as hepatitis C and multiple sclerosis. We will continue to see patients put pressure on manufacturers and providers to lower the cost of these drugs, and the patients’ ability to price-compare could have a real impact. The more patients empower themselves with knowledge on their medication and its cost, the more likely they will pay a lower price at the pharmacy. This behavior includes not only choosing generic drugs over name brands but switching pharmacies to get the best price.
Price and Quality
More expensive does not necessarily mean better, particularly when it comes to prescription drugs. Many providers and insurance companies have worked diligently to keep prices hidden, but with more price transparency tools becoming available, healthcare financial managers can now recommend ways for patients to compare prices and make more informed decisions regarding their prescriptions. For example, Atorvastatin (generic Lipitor) can be an alternative for any medication in the statin therapeutic class. Patients taking brand name Crestor® or Mevacor® can easily switch to Atorvastatin and pay much less for comparable efficacy.
Price transparency is a group effort, but it must begin with the finance leader. Itemized bills and options to supplement insurance coverage to offset out-of-pocket costs are just a few resources consumers need to make informed decisions. The end goal is not only to make healthcare more affordable but also to provide a more efficient healthcare delivery system with no compromise in quality.
Joseph Sanginiti is President and CEO of FamilyWize, Bethlehem, Pa.