DAVID BRISTOL
The last thing that people should have to worry about during a pandemic is whether a trip to the hospital will bankrupt them. To improve coronavirus patient outcomes, protect public health, and get Americans safely back to work, those experiencing symptoms must seek treatment immediately, without financial concerns dissuading or delaying them.
Fortunately, the federal government and major health insurance companies have recently promised to cover coronavirus treatments for the uninsured and those on fully insured health plans. This coverage offers some near-term peace of mind to tens of millions of Americans concerned about how the coronavirus could impact their health and wealth.
Yet there is still one major group of Americans who slips through these coverage cracks: those employed by small businesses like mine that self-insure.
Roughly 60 percent of the 181 million Americans who have employer-provided health insurance are covered by self-insured plans.
In this model, employers take responsibility for all of their employees’ healthcare costs under a cost-sharing agreement. Employers who have had to furlough employees during this crisis generally pay all of their monthly healthcare costs.
The millions of self-insured small businesses, and the tens of millions of employees who work for them, are therefore significantly exposed to the costs associated with coronavirus treatments.
Price transparency would offer us significant financial protections because it would hold hospitals accountable for what they charge.
Early estimates of coronavirus treatment costs are staggering.
The insurance brokerage Hub International expects prices of $10,000 per day in the hospital. With an average stay for severe cases of 10 days, employers can easily face a bill of $100,000 or more. Other estimates predict serious cases will cost about $30,000.
According to the consultancy Willis Towers Watson, health costs for self-insured businesses could rise by 7% this year if the disease hospitalizes their employees.
These costs are coming at a time when small businesses can least afford them.
Governments have ordered companies to close their doors, and customers are scared to make purchases.
More than 33 million Americans have filed for unemployment benefits over the last seven weeks.
Additional five- to six-figure bills for employee coronavirus treatments will put some of these firms out of business.
Entrepreneurial small businesses like mine aren’t looking for a handout. We’re asking for a hand up in the form of price transparency guarantees from hospitals.
Clear prices before treatment can allow us to steer sick employees to hospitals that offer the best care for the lowest price. Price discovery can enable us to shop for healthcare, empowering us to avoid hospitals that price gouge.
When hospitals are required to compete for “customer” dollars like other businesses, they will lower their prices, creating a market.
This information will allow employers and employees to budget their coronavirus costs. No longer will they be at the mercy of an inflationary system where they don’t know what they’ll pay until bills show up weeks and months later.
Price transparency puts healthcare consumers in the driver’s seat – a welcome change from the status quo where hospitals take us for a ride.
In today’s quarantine environment, where we’re doing all our shopping online, the lack of clear prices for healthcare is especially conspicuous. We need to know before we go.
Thanks to a provision in the $2.3 trillion “Phase 3” federal stimulus legislation passed last month, healthcare providers must publish their prices for coronavirus tests.
But this is mere table ante for broader price transparency protections for treatments and, ultimately, all of healthcare.
In the forthcoming “Phase 4” stimulus legislation, lawmakers can extend this provision to help employers like me budget and better position ourselves to lead the country out of the recession.
Price discovery benefits more than self-insured employers and their employees. By holding hospitals accountable for their prices, it helps taxpayers who are picking up the tab for those without insurance.
And to the extent that fully insured plans pass on their coronavirus treatment costs to policyholders, it keeps premiums in check. (Health insurers are also saving money right now due to fewer claims for expensive elective procedures that are mostly on hold.)
Perhaps most importantly, price transparency is a valuable weapon in the fight against this pandemic because it can alleviate the bankruptcy concerns of patients and employers, accelerating treatments and decreasing case-counts.
David Bristol is the CEO of Employee Solutions in Dallas.