Insurers may benefit from consumer demand for transparency in healthcare costs
Boston, June 05, 2013 – Banks, card networks, merchant acquirers, clinicians, and hospitals may all see revenue increase from consumer demand for greater transparency on healthcare costs, finds Aite Group in a report announced today. As a result of greater price transparency, a revenue growth of 32% CAGR is predicted in the U.S. healthcare insurance market from 2012 to 2016.
Aite Group defines "price transparency" as the availability of consumer pricing information prior to making an appointment, at the point of delivery, and once the bill is received. These consumer touch points constitute the price-transparency value chain and translate to pre-service research (52% CAGR increase, 2012 to 2016), point-of-service estimation (52% CAGR increase, 2012 to 2016), and post-service billing (67% CAGR increase, 2012 to 2016). There are few industries in which consumers agree to spend their precious financial resources on a product or service without first knowing its price. Yet, in U.S. healthcare, consumers are programmed to do just that. Legislative changes are paving the way for a host of new entrants in the healthcare insurance market who stand to benefit commercially.
In total, the number of U.S. healthcare consumers with high-deductible health plans and increased out-of-pocket responsibility will reach 75 million covered lives in 2013. These individuals have a serious reason to be more price sensitive than do traditionally insured consumers. Enter consumer demand for price transparency in healthcare. The demand for greater price transparency is not exclusive to HDHP consumers, however—uninsured consumers and non-HDHP-insured consumers also seek out information that aligns the quality of care with the cost of receiving that care. All U.S. healthcare participants must be able to choose providers based on the value, price, and quality of healthcare providers and to understand the cost of care at the office and upon receiving the bill.
“Historically, consumers experience ‘sticker shock’ when receiving a bill exceeding expectations, leading many to skip paying their healthcare bills altogether and increasing bad debt for providers. Also, consumers increasingly find that they cannot understand their healthcare bills, leading many to simply not pay. Greater transparency is a consumer benefit that now presents strong revenue opportunities, benefiting the key players and the consumer,” says Michael Trilli, senior analyst in health insurance at Aite Group.
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