Health Plan Price Transparency
Negotiated rates for in-network providers have been the most closely guarded trade secret of health insurers – until now.
What do you need to know about pricing in your market?
Transforming machine-readable files into actionable insights.
Health plan price transparency now reveals the variation in reimbursement across markets and services – but only for those who can link the identity of a provider with the services that provider renders, the locations at which the provider renders those services and the reimbursement rate the provider receives for those services.
How can health plan price transparency improve your network performance?
Benchmark Rates
Understand rates for specific providers in a market, as well as nationwide, to prepare for managed care negotiations.
Evaluate New Markets
Evaluate expansion into new markets with insight into rates and volumes for services.
Strategic Planning
Develop strategic plans and model return on invested capital with insight into rates across services, settings of care and provider types.
Assess M&A
Evaluate opportunities with insight into provider-level negotiated rates.
Total Cost of Care
Assess risk based on the actual total cost of care for a population.
Develop Networks
Identify high- and low-cost providers to deliver more value for money.
Negotiated rates for in-network providers have long been the most closely guarded trade secret of health insurers, protected by confidentiality clauses and antitrust regulations.
The longstanding information asymmetry between the providers of healthcare services – physicians, clinics, surgery centers, hospitals – and health insurers has made financial forecasting difficult and value-based care theoretical. Historically, this information asymmetry has been not only endorsed but also enforced by the Federal government, with the Sherman Act forbidding disclosure of negotiated rates for healthcare services among other things. CMS’s Transparency in Coverage initiative for health plan price transparency changes all of that.
Health plan price transparency is starkly different from hospital price transparency.
Even if hospitals fully complied with CMS regulations, the paltry mix of “standard charges” for 70 CMS-designated “shoppable services” and 230 hospital-selected items from chargemasters with more than 40,000 items makes hospital price transparency essentially useless for health economy stakeholders.
In contrast, health plan price transparency includes all covered items and services between the plan or issuer and in-network providers.
Predicting all that will happen with the advent of true price transparency in the health economy is impossible, but it is not difficult to imagine that there will be a first-mover advantage. What is likely is that health economy stakeholders will have numerous complex questions and use cases that cannot be answered by simple queries. What is possible is that health plan price transparency will inaugurate an era of value-based competition in the health economy. What is certain today is that Trilliant Health partners will be the only stakeholders in the health economy who can solve this equation:
Everything you have read about the complexity of health plan price transparency is true. Complex, but not impossible.
Trilliant Health’s unique mix of engineering capabilities, proprietary Provider Directory and understanding of healthcare services allows us to unlock valuable insights from health plan price transparency for every stakeholder in the health economy.
Source: Trilliant Health analysis of Health Plan Price Transparency machine-readable files.
The complexity of merely downloading data that is 85X larger than the amount of data in the Library of Congress is extraordinary.
Normalizing the health plan price transparency data is also tremendously challenging, because some health plans posted thousands of files with tens of millions of data points in each, while others posted millions of files with hundreds of data points.
For example, a health plan might post rates for cardiology or obstetrics procedures for a physical therapist.
As a result, understanding the identity of and services rendered by every provider is foundational to connecting a negotiated rate to a specific provider at a specific location.
Source: Trilliant Health analysis of Health Plan Price Transparency machine-readable files.
Data-driven Insights on the Health Economy
The health economy creates more data than any other part of the U.S. economy. Trilliant Health’s publications and reports examine the organization, financing and delivery of healthcare from the lens of demand, supply and yield.
Strategy: Employers Care About Value for Money, Not Value-Based Care
As employers begin to discover how little value for money they are receiving — and specifically, who the lowest value providers are — they may begin to think of “value-based care” as a reimbursement “scheme.”
While Originally Intended for Consumers, Health Plan Price Transparency Will Ultimately Promote Value-Based Competition
Negotiated rates for in-network providers have long been the most closely guarded trade secret of health insurers, protected by confidentiality clauses and antitrust regulations
Strategy: It’s All About Rate
Many health economy stakeholders believe that financial success depends upon increasing market share, seemingly unaware that demand for healthcare services is relatively flat and the total addressable market of commercially insured patients is shrinking. But the secret is this: rate.