Okay campers, let’s rise and shine because it’s a transparent day out there! Er, wait sorry. Let’s try that again. Okay campers, let’s rise and shine because it’s a transparent day out there! Er, wait sorry. Let’s try that again. Okay campers, let’s rise and shine…
Huh.
Much like Bill Murray’s character, Phil, awoken by the sweet dulcet tones of “I Got You Babe” in Groundhog Day (1993) again and again and again, we’re happy to wake you up with the news that Punxsutawney Phil saw more than his shadow this morning. Yes, he saw price transparency in healthcare.
Much like the premise of this cult-classic film, healthcare managed care contract negotiations have looked the same, day in and day out, for decades. While Bill Murray (Phil) tried just about everything to break his repeating day, the government has tried to shake the industry out of its stupor (All Payer Claims DBs, iterations of tepid transparency regs…). Now, like a splash of cold water to the face, we have a triumvirate of fresh transparency rules and terabytes of negotiated rates data to break the cycle.
Let’s do the time loop again
To patients and purchasers, the transparency data provides easier avenues to seek affordable, quality care. To providers, transparency data provides never-before-seen insight to hyper-specific market rates of peers. With the knowledge of exactly how much your peers are being paid (or paying out), you can better understand the industry benchmarks and where your negotiating power stands.
Better yet, when both parties are working off of the same publicly available pricing data, there is opportunity to take some contention out of the negotiating process and let the data act as guide. Don’t believe us? Let’s take a trip back in time to explore a hypothetical end to a very real situation. Same day, different result if you will.
At the beginning of 2021, UnitedHealthcare announced it would no longer include Montefiore Health System as part of its network, leaving about 60,000 New York patients and employers without access to their closest major hospital at the (then) height of the COVID-19 pandemic. Yeah, not good. Six months later, they had still not come to an agreement of terms, with UHC issuing a letter to affected employers saying that they were trying to come to a compromise with Montefiore that included rates “...significantly more than the market demands and exceed[ed] the most recent monthly Consumer Price index for All Medical Care.” In response, Montefiore also sent its own letter saying that UHC only offered “$5M Additional in upfront cash yet they continue to owe us more than $95 million for care already provided…” This story continued to evolve, and we’re happy to say that at the end of 2021, the two had finally come to an agreement.
But why do these disputes generally take so long? Often, the answer lies in asymmetric and incongruent data. Single source of truth can drastically simplify negotiations in these disputes, as well as in pre-emptive negotiations for in-network agreements. Both parties could have spent that time looking at the same market data rather than trying to confirm (or refute) the other party's version of the truth by comparing claims data. These conundrums should not be subjective: either Montefiore's prices were too high or UHC's reimbursement rates were too low compared to the true economic value of Montefiore’s service offerings. Sure, “low” and “high” prices are subjective. But when you weigh them against an entire industry, these numbers start to look a lot simpler. Now how do we prevent this from happening again tomorrow?
Phil vs Phil
Every year or so, contract negotiations start over. Sure, time may have passed but these negotiations have a way of making it feel as though you just did them yesterday. It’s always the same song and dance, with the same pain points, and the same results. But, since this is a new round of negotiations, both sides usually pretend that this time will be different. And we might be optimists, but we think it actually can be. The power in negotiations has historically favored one side over the other—who has the most market leverage or access to data? But in the age of price transparency, we think those scales could tip back towards even. This would result in a win for a healthy functioning economic process (and all parties involved). Come July 1, 2022, payers will also be required to publish their machine-readable files. Both parties are also beholden to the No Surprises Act. So will we expect to see fewer adversarial negotiations and more negotiations grounded in data?
What Day Is It Again?
And of course, let’s not forget the purpose of the recent transparency regulations: a fair deal for patients and at a macro level, a better overall spending picture for healthcare in the US. Both cash pay and insured patients have similar poor financial experiences and suffer from medical debt. In a companion survey published by the Kaiser Family Foundation/New York Times Medical Bills Survey, results show that while insurance may “protect people from having medical bills problems in the first place, once those problems occur the consequences are similar regardless of insurance status.” The new, positive patient experience starts all the way upstream at the negotiation, continues through the estimate, and wraps up with a clean billing and collections process. And while the No Surprises Act places this onus on the shoulders of both providers and payers, it also paves the way for an ecosystem of startups and tech innovators (like us!) to assist in building out a transparent future.
Breaking the Cycle
If you’ve seen Groundhog Day (and if you haven’t you really should give it a watch), you might struggle to remember exactly how Phil gets out of what was apparently 33 years and 350 days of the same day. He lets time continue to repeat itself, submitting himself to the process, while he gets good at playing piano, sculpting ice, and becoming Rita’s ideal man until the cycle finally breaks.
Turquoise is here to help payers and providers break the same routine and move forward. Through our data-enabled Clear Contracts platform, or our patient-friendly compliance solutions, we invite you (and the government is kind of prodding us all) towards a price transparent future. Maybe if we all let it happen and do our best to adapt, we’ll suddenly find ourselves 33 years down the road, happy, healthy, and sipping a glass filled with Rita’s signature drink, Sweet Vermouth on the rocks with a twist.