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EDITORIAL: Transparency and holding down health care costs

Under a new federal regulation that went on the books at the start of the year, hospitals are required to post online the prices of services offered. Not surprisingly, some facilities aren’t eager to comply and are attempting to undermine the point of the new requirement.

The mandate, issued by the Centers for Medicare and Medicaid Services, is an effort to address one of the more vexing problems in health care: a lack of consumer awareness about the cost of treatment. Thanks to a tangled web of insurance companies, medical providers and government bureaucrats, few patients have any idea what they’re paying for the care they request or require.

Is it any wonder, then, that health care costs continue to gobble up a greater and greater share of gross domestic product?

This lack of transparency eliminates a vital competitive pressure on doctors and hospitals that might help control costs. Meanwhile, patients are forced to navigate a confusing mélange of bills and insurance notices after the fact.

In what other segment of the marketplace would average consumers accept an arrangement in which they purchase a service or product without knowing their financial obligation?

Obviously, comparison shopping isn’t possible when it comes to many medical emergencies. But providing patients with more information about the costs of services would give them a powerful tool to better manage future decisions about health care and insurance.

“Experts have long agreed that price transparency in the health care industry has a number of positive consequences,” the Robert Wood Johnson Foundation noted in a 2016 paper, adding that “the historical opacity of health care prices is widely believed to be a major factor inhibiting the more efficient functioning of the delivery system.”

Despite the new regulations, the Review-Journal’s Jessie Bekker reported this week that local hospitals aren’t making things easier for discerning Southern Nevada patients. The majority of Las Vegas- area facilities have published price information that is rife with insurance industry jargon and indecipherable to the layperson.

Hospitals complain it’s difficult to reveal prices when costs may vary widely depending on patient circumstances and insurance coverage. There’s some truth to this. But the fact that many local medical centers have opted to essentially provide consumers with incomprehensible blather suggests they aren’t trying very hard to adhere to the spirit of the rule.

Either way, Jeff Leibach, a health care analyst, told the Review-Journal that the new regulation is at least “pushing hospitals to think more about consumerism.” That’s a good thing — even if the new transparency regulations will require further tweaking to ensure consumers get the information in plain English.

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