Advancing Healthcare: The Benefits of Pricing Transparency in the Private Health Care Services Sector

The healthcare landscape in the Middle East has witnessed remarkable advancements in recent years. The cost of treatment continues to rise in the Middle East due to rise in treatment for complex conditions, rise in chronic conditions, high dependence on imports, and a lack of specialized treatment centers. One critical area that demands attention is hospital pricing transparency [1]. Lack of clear and accessible information regarding healthcare costs not only poses financial challenges for patients but also hinders the region's progress towards a more patient-centric and efficient healthcare system [2].

Transparency efforts should prioritize enhancing patient engagement, providing accurate patient-specific out-of-pocket cost information, facilitating comparisons of available treatment and provider options, and integrating price information with quality metrics to empower individuals to make fully informed decisions.

Dr Whaley in his recent testimonial to the U.S. House of Representatives made a strong case for the health care price transparency. He stated that that while it isn't a cure-all for the complexities of the U.S. healthcare system or a tool to burden patients, rather, it serves as a central hub for fostering innovative benefit designs and policies aimed at reducing healthcare costs and enhancing quality. Recent federal initiatives aim to broaden access to price transparency data through two key mandates [3] Firstly, hospitals must disclose prices for approximately 300 shoppable services. Secondly, insurers are obligated to reveal their negotiated rates. However, significant implementation barriers hinder the effectiveness of these policies, with roughly 75% of hospitals failing to comply with price disclosure requirements [3]. Existing price transparency tools in U.S and European health care systems often fall short in user-friendliness, proving difficult to navigate and focusing primarily on charges and health plan negotiated rates rather than patients' actual out-of-pocket costs [4]. Moreover, they typically disclose prices at the service level rather than for entire episodes of care, rendering the disclosed amounts unreliable. Many of these tools also lack valid and measurable quality metrics, potentially leading to the selection of high-cost care as a proxy for high-value care and contributing to increased healthcare prices when providers seek to imply, they offer superior quality [4]. To truly prioritize patients' needs, transparency efforts should prioritize enhancing patient engagement, providing accurate patient-specific out-of-pocket cost information, facilitating comparisons of available treatment and provider options, and integrating price information with quality metrics to empower individuals to make fully informed decisions [4].?

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In many Middle Eastern countries, the opacity surrounding hospital pricing remains a significant obstacle to an inclusive and patient-friendly healthcare system [4,5]. Patients often face unexpected financial burdens due to unclear billing practices and the absence of standardized price disclosure for inpatient services, especially in the private health care system [6]. This lack of transparency not only affects individual patients but also contributes to the overall rising costs of healthcare in the region. Cost of care varies for insured patients vs. out-of-pocket payers [6]. The subsidized and discount rate to see a doctor for out-of-pocket payers varied on case-to-case basis which also justifies the need for standardized practice. Pricing transparency would also help patients and family be better prepared and informed about the cost of care [6].?

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Key Components of Hospital Pricing Transparency:?

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• Standardized Price Disclosure: Implementing standardized price disclosure practices is crucial for ensuring that patients have access to clear and comparable information about the costs of medical services. The practice is aimed at enhancing transparency and empowering patients to make informed decisions about their medical care. This involves the implementation of clear and consistent methods for presenting the costs of healthcare services, allowing patients to easily compare prices across different institutions. By standardizing the presentation of prices, patients gain a comprehensive understanding of the financial aspects associated with their healthcare choices, promoting a more consumer-friendly healthcare environment [7]. Standardized price disclosure not only facilitates informed decision-making but also fosters competition among healthcare organizations, encouraging them to offer competitive prices and improve the overall efficiency of their services. This practice aligns with the broader goal of creating a patient-centric healthcare system where accessibility, affordability, and quality are paramount.?

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• Patient-Centric Cost Estimators: Implementing patient-centric cost estimators can help individuals anticipate their out-of-pocket expenses before undergoing medical procedures. Tools and applications that provide real-time cost estimates contribute to a more transparent and patient-friendly healthcare system [8]. Out-of-pocket payers can be offered payment plans upon request which would further help reduce the financial burden on patients that need urgent care but are unable to afford full payment at the time of discharge.??

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• Publication of Negotiated Rates: Requiring hospitals to publish their negotiated rates with insurers enhances transparency and helps patients understand the actual costs associated with medical services. Pricing transparency would also help patient clearly understand the cost of maintaining health insurance and compare plans and rates that best fit their and their family’s needs. This practice, when enforced, can foster trust and accountability in the healthcare system. All health care systems can be required to maintain a charge master that clearly prices out all the prices for hospital services. For the chargemaster to be integrated, this would require a policy level change at the governing agency level. This would allow governing agencies to monitor and ensure that fair pricing of services does occur in their nation’s health system and there is no unfair practices or price gauging occurring.??

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Benefits of Hospital Pricing Transparency:?

• Informed Decision-Making: Transparent pricing empowers patients to make well-informed decisions about their healthcare. Access to clear information enables patients to choose institutions and services based on both quality and cost considerations.?
• Competitive Healthcare Market: Increased transparency fosters competition among healthcare institutions, motivating them to offer competitive prices and improve the overall quality of healthcare services. This, in turn, can contribute to a more efficient and affordable healthcare market.?
• Governmental Support and Regulatory Framework: Governments play a pivotal role in promoting hospital pricing transparency through legislative measures and regulatory frameworks. Establishing clear guidelines and enforcing compliance from healthcare institutions are essential steps towards achieving transparency goals.?

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For countries in the pursuit of implementing universal health coverage (UHC), policymakers face critical decisions regarding the scope of coverage, including who is eligible for public benefits, which services are encompassed, and the corresponding reimbursement rates [9]. As public spending on UHC rises, there is a heightened emphasis on maximizing the value derived from these investments, necessitating careful consideration of how funds are allocated, and services organized to meet the populace's healthcare needs effectively [9]. Pricing policies play a pivotal role in shaping these decisions, influencing the composition of benefits packages, methods of compensating healthcare providers, and strategies for leveraging resources from the private healthcare sector [9].??

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Japan stands as a notable example of effective price setting in healthcare services, successfully containing healthcare costs through its comprehensive approach. By leveraging such experiences and implementing transparent pricing practices, healthcare systems worldwide can strive toward greater affordability, accessibility, and quality of care for all [9]. Unilateral price setting has demonstrated notable advantages in regulating price levels, mitigating price discrimination, and fostering quality incentives within the healthcare sector [1,9,10]. This approach to pricing has effectively controlled service volumes and bolstered quality standards. For instance, it has facilitated reductions in prices for recurring unplanned outpatient visits, hospital admissions, and sentinel events, thus encouraging more efficient utilization of healthcare resources [9]. Furthermore, adjustments to prices have been instrumental in aligning with broader public health objectives, such as tailoring prices for rural and remote healthcare facilities and those serving predominantly low-income or high-cost patient populations [9]. Hospital pricing transparency is not only a global necessity but also a critical requirement for the continued advancement of healthcare. By embracing transparent pricing practices, Middle Eastern countries can build a more patient-centric and cost-effective healthcare system. Policymakers, healthcare institutions, and patients must collaborate to implement and support initiatives that enhance transparency in hospital pricing, ultimately contributing to a healthier and more equitable future for the region.?

References:??

1. Al-Balushi, S., & Khan, F. R. (2017). Factors influencing the preference of private hospitals to public hospitals in Oman.?International Journal of Management, Innovation & Entrepreneurial Research EISSN, 2395-7662.?

1. Al-Mawali, A., Al-Harrasi, A., Jayapal, S. K., Al-Kharusi, H., Al-Rashdi, M., & Pinto, A. D. (2020). Health research priority setting in Oman: Towards better utilization of the available resources.?Journal of Contemporary Medical Sciences,?6(3).??

1. Whaley, C. (2023). Health Care Price Transparency: Opportunities to Improve Affordability and Data Effectiveness. RAND Corporation. Source: https://www.rand.org/multimedia/video/2023/05/16/health-care-price-transparency.html ?
2. Araich, H., Tran, J., Jung, J., Horny, M., & Sadigh, G. (2023). Healthcare price transparency in North America and Europe.?The British journal of radiology,?96(1151), 20230236. https://doi.org/10.1259/bjr.20230236 ?
3. Kanavos, P., Tzouma, V., Fontrier, A. M., Kamphuis, B., Parkin, G. C., & Saleh, S. (2018). Pharmaceutical pricing and reimbursement in the Middle East and North Africa region.?London: LSE Consulting, London School of Economics and Political Science.?
4. Lu, A. J., Chen, E. M., Vutam, E., Brandt, J., & Sadda, P. (2020, September). Price transparency implementation: accessibility of hospital chargemasters and variation in hospital pricing after CMS mandate. In?Healthcare?(Vol. 8, No. 3, p. 100443). Elsevier.?
5. Pauly, M. V., & Burns, L. R. (2008). Price transparency for medical devices.?Health Affairs,?27(6), 1544-1553.?
6. Pathak, N. (2023).?Understanding the Impact of Hospital Price Transparency Initiatives on Consumer Decision-Making to Purchase Healthcare Services?(Doctoral dissertation, The University of Alabama at Birmingham).?
7. WHO. Price Setting: Health Care Implications Universal Coverage. Source: https://extranet.who.int/kobe_centre/en/content/price-setting-health-care-implications-universal-health-coverage ?
8. Zhang, A., Prang, K. H., Devlin, N., Scott, A., & Kelaher, M. (2020). The impact of price transparency on consumers and providers: a scoping review.?Health Policy,?124(8), 819-825.?

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