Give Americans the right to save on health care

Dani Yuengling, a 35-year-old South Carolinian, had a family history of fatal breast cancer. So when she noticed a lump in one of her breasts, she immediately made an appointment to see her doctor. Though her biopsy was covered by insurance, she still had to pay $5,169 out of her own pocket.

If she hadn’t used her insurance, Yuengling would have saved $3,000.

This story is far too common. Insurers don’t negotiate the best deals and patients waste money paying for treatments their insurers “cover.”

Reducing the price of health care has stumped politicians for a long time. As election season comes to a close, politicians will need to move beyond their campaign talking points about health care reform and start working to implement ideas to help people like Yuengling.

That’s why we designed for the Cicero Institute the Patient’s Right to Save Act: a policy to ensure that individuals with insurance know the best cash price that will be accepted for care and don’t get penalized by their insurer for saving money with a cash-based option. It also gives the sickest people a financial incentive when they seek care via a less-expensive cash option to help offset their high out-of-pocket costs. These steps can cut wasteful spending up to 40% by rewarding people who shop for the best prices without sacrificing quality.

Price transparency has been a bipartisan focus of health care reformers for decades. Thanks to federal regulations set by the previous administration, it’s easier to discover hospital and insurer prices. But transparency alone won’t create a robust market. Massachusetts was the first state to require full price transparency in 2012, but, since most patients’ bills are set by insurance companies, they rarely use it.

People should be rewarded for using price transparency data and deserve the right to shop for the best provider. We propose three simple steps to restore market functionality to health care and incentivize people to use price transparency data.

First, all providers and health systems should publish cash prices. By doing so, they can save money on insurance paperwork, get paid immediately — rather than 60 to 120 days later — and pass along to patients some of these savings. Being able to see published cash prices gives patients price certainty, which is a primary concern when seeking care; uncertainty is a significant reason many skip needed care.

Second, patients should receive credit toward their deductible (the out-of-pocket amount they pay before insurance kicks in) if they choose lower-cost cash providers. Insurers currently give deductible credit only for in-network rates, which can cost more, as it did for Dani. This reform would allow patients to jump their insurer’s network wall if the insurer blocks access to less-expensive care.

Third, insurers should split any post-deductible saving 50/50 with the patient who identified and chose the lower-cost care. Currently, those who hit their deductible have little incentive to find a lower-cost treatment option since they only pay a small percentage of the bill.

Today, if a patient shops and saves their insurance company $10,000 after meeting their deductible, the patient doesn’t directly benefit. Instead, those savings are spread out over every enrollee on that health plan. There’s no incentive to take the time to seek out lower-cost care, so most stick with expensive care. It is like going out to dinner and, once you learn the bill is being split evenly by everyone, ordering a more expensive entree.

With the Patient’s Right to Save Act in place, an individual who saves their insurer $10,000 would see an immediate $5,000 payment, significantly increasing their incentive to shop for savings while driving down premiums for everyone on the plan.

Apps and websites could even help patients like Dani Yuengling find the best deals, and get paid when they save the user money. Companies as diverse as GoodRx, Healthcare Bluebook, HealthSparq, MediBid, Sesame, TALON, Trim, Turquoise Health, and Zelis’ Sapphire Digital would all be well positioned to find good deals for patients.

Under the Patient’s Right to Save Act, individuals will have certainty on prices before treatment and will be rewarded for using that information to get the best deal. Doctors will compete on price and quality and reduce costly administrative burdens. Insurers will see their costs drop and can reward customers who actively manage their own costs. Patients with pre-existing conditions or chronic conditions will benefit the most as they often have numerous costly medical bills.

High-cost providers and health systems that have successfully managed to remain in-network for most health plans and reap high profits are likely to oppose this reform. But since patient outcomes often have little correlation with the cost of care, many policymakers will decide that such opposition doesn’t outweigh the opportunity to drive down costs without sacrificing patient care.

Health care price inflation continues to overwhelm businesses and families alike, hurting the economy and personal health. While health care price transparency is one of the few areas where Democrats and Republicans agree, transparency can address rising prices only when people use it.

Dani Yuengling needed to know if the lump she found in her breast was benign or cancer. With the Patient’s Right to Save Act in place, she would have known the exact price of her ultrasound-guided biopsy ahead of time, and would have saved more than $3,000, which could have been redirected to paying for housing or helping offset the bite of inflation. Policymakers should embrace the opportunity to unleash the power of price transparency with the Patient’s Right to Save Act, which not only gives patients price information before they seek care but also rewards those who find the best deals.

Jonathan Wolfson is chief legal officer and policy director at the Cicero Institute, where Josh Archambault is a senior fellow. Wolfson previously led the policy office at the U.S. Department of Labor.