Health insurance price disclosure won't lower costs

When it comes to health care, consumers are looking for two things: accessibility and affordability.

The Trump Administration's Executive Order requiring the disclosure of negotiated rates for treatments and services agreed upon by health care providers and insurers will not accomplish either of these goals.

One of the big problems with health care is that its cost can at times seem like a moving target. When a person goes to a store to buy groceries, there are options with prices clearly marked. Healthcare costs are much more complicated, because third parties - whether it is government or insurance companies - are involved.

A 2016 study from the Journal of the American Medical Association of employee health care decisions found that pricing tools made available to employees did not lower aggregate outpatient spending. In fact, the opposite happened. Spending increased.

The truth is price transparency will have little impact on consumers because many consumers will not have the luxury of shopping for the best prices. In rural areas, there are few health care options available and more and more rural hospitals are disappearing every day. According to a report from the U.S. Government Accountability Office earlier this year, 64 rural hospitals closed between 2013 and 2017, which is more than twice the number of rural hospital closures in the prior 25 years.

About 673 rural hospitals are in danger of shutting down and currently, 16 percent of Americans live 30 or more miles away from the closest hospital or emergency care center. If hospital partnerships with specific insurance companies limit patients' health care options, that 30-mile net could widen considerably.

While price transparency does little for consumers, it does quite a bit for insurance companies. Pricing transparency could lead to collusion and price fixing at higher rates, which would not benefit consumers.

Another potential impact of price transparency would be that insurance companies race to the bottom in terms of pricing with only the largest companies being able to survive. Larger companies would be able to drive smaller companies out of business leaving consumer with fewer options.

The intent behind the president's executive order is good, but the practical application will not likely create the intended outcome. It will lead to fewer health care choices for consumers, which will not lead to lower prices.

What is needed in health care is competition. Consumers need options when it comes to health care coverage. Consumers want choices. They want insurance plans that fit their needs. If insurance negotiations are done in the open - the reimbursement rates for various services are likely to be the same, 8which means less flexibility in coverage.

For instance, a person might want a health care plan that offers great discounts on prescriptions because they need those discounts for the prescriptions they use. The trade-off there is that other kinds of health care might cost the insured more, but if the insured places a premium on prescription drug coverage - then they will choose that plan.

Making these insurance negotiations public could lead to a one size fits all health care solution and that decreases choice and is ultimately bad for consumers. Consumers need and deserve a wide range of plans to choose from - not one size fits all options that requires consumers to pay for more coverage than they actually need.

If the goal is to lower the cost of health care, let's scrap the president's executive order and implement policies that will create more competition and provide consumers with more choice and more options

Travis Akin, of Marion, is a consultant, political activist and licensed insurance producer.