Transparency Savings White Paper: Save $36 Billion In U.S. Healthcare Spending Through Price Transparency
By Bobbi Coluni, Senior Director, Consumer Innovations, Thomson Reuters, February 2012
Healthcare in the United States is a $2 trillion industry that accounts for 17 percent of the Gross Domestic Product (GDP). Healthcare spending continues to increase at a rate of nearly 10 percent annually. By 2020, experts estimate that it will grow to consume 21 percent of GDP.
Finding ways to better manage healthcare spending is critical to the nation’s financial future and its ability to remain competitive. Recent changes to healthcare benefits, including the opportunity for consumers to exercise more choice in selecting providers and treatments, have the potential to help reduce costs. Yet despite the choices available, consumers often lack information vital to making informed decisions about their healthcare.
Price transparency is one area where information is especially lacking. Studies show that healthcare costs for the same procedure in the same market can vary by more than 100 percent. Providing consumers with clear, comparative information on the cost of services is key to further engaging them in the decision-making process and, ultimately, reducing healthcare costs.
This white paper explores how reducing price variation for the 108 million Americans with employer-sponsored insurance could save the nation as much as $36 billion per year. It also draws on Thomson Reuters research findings and respected literature in the field to identify key issues surrounding price transparency and offers eight best practices for implementing successful price transparency initaitives.