The dark side of price transparency for ASCs

Price transparency seems great for ASCs as the high quality, low cost-of-care provider.

If insurers and patients knew they could have the same surgical procedure at a surgery center as the hospital at a fraction of the price, ASCs would be the clear option for care. Outpatient surgeries would then flow into surgery centers, giving them the needed volume to run a great business.

Hospitals would then be free to focus on the high acuity care that needs longer inpatient stays and often is reimbursed better. Some surgery centers are already posting prices online and attracting cash-pay patients and self-insured employers. It seems like a win-win-win for patients, providers and insurers.

But price transparency isn't that clear cut.

To start, if the charges for surgery centers are posted online, as they are at hospitals, competitors can see the pricing structure and aim to beat it. The reimbursement for procedures at ASCs in competitive markets would then be a race to the bottom. Surgery centers likely would still have lower prices than hospitals, but what about the other ASCs in town? Insurers would also be able to see the contracts surgery centers have with other payers and try to negotiate down prices.

Many surgery centers would also need to devote additional resources to gathering and organizing cost data and then posting it online. When hospitals were required to post prices online last year, many scrambled to gather the necessary information and figure out how to present it in a user-friendly format on their websites. There are still several hospitals that haven't done so and face penalties.

Finally, price transparency can also lead to unrealistic expectations from patients. Surgeons may give the best estimate based on the information they have prior to surgery but then realize additional services are needed after the procedure begins.

Price transparency is an important step to lowering healthcare spend and empowering patients to make the right care decisions. But surgery centers also need to know how the potential changes could affect their bottom line and insurer negotiations well before those changes occur.

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