Increasing Price Transparency in Healthcare


With healthcare costs on the rise, patients are demanding answers. Are physicians equipped to respond?

When it comes to cost, the world of healthcare has become opaque for patients, and seems to grow less clear and more daunting each day. Copays are higher, insurance premiums are rising, and patients often have no clue what to expect a treatment to cost before the bill arrives in the mail weeks later. Visits to the doctor are filled with dread not far from the “fear of needles” feeling experienced by children — except for adults, the potential consequences of being unable to pay can last far longer than the quick sting of a tetanus vaccination.

Sadly, surprise payments and unreliable coverage are seen by many individuals as unavoidable parts of seeking healthcare, causing them to try to avoid seeking assistance with their health in the first place. Professionals in the healthcare sector are aware of their patients’ issues with costs — both the unaffordability and the lack of transparency — but often, the price of treatments is just as surprising for them.

“As physicians, sometimes we’re very shocked by the cost of certain medications or certain treatments that we have been advocating and we have been dispensing,” admitted Janis Orlowski, MD, MACP, chief health care officer for the Association of American Medical Colleges (AAMC). “We get caught by surprise sometimes.”

With this in mind, in April, the AAMC released a set of online resources with the goal of increasing price transparency in hospitals, starting with the physicians themselves. The 2014-2015 AAMC Advisory Panel on Health Care worked to develop a resource that was aimed directly at healthcare professionals who, in the past, have had next to nothing to do with patients’ payment process. Now, it is up to these individuals to combat the lack of price transparency in healthcare.

The compilation of resources offered by the AAMC, available online as a set of links or as a downloadable PDF, is designed to give healthcare providers the necessary information to give patients the answers to two key questions:

  1. What is the charge buying (type of service over what period of time)?
  2. What is the value of the product or service?

Additionally, in the introduction to the compilation, the AAMC recommends that “providers, insurers and policymakers use the same terms when discussing healthcare charges, prices, costs and value, and all healthcare providers and insurers use a consistent framework for presenting information so that patients can effectively evaluate what a particular dollar amount means.”1

“Physicians need to have an understanding of the basic terminology,” Orlowski said. She emphasized that although physicians aren’t — and shouldn’t be — expected to actually calculate treatment prices and copays, they do need to have an understanding of the key financial terms in the field in order to best serve patients and to help them determine whether or not a recommended treatment is truly in their price range. “In relative terms, the physician should understand if the therapy they are providing will costs tens of dollars, hundreds of dollars, thousands of dollars or more,” she continued.

To those outside of the realm of healthcare, it may at first seem strange that many physicians are unable to estimate how much certain treatments will cost. However, Orlowski explained that, with the way that physicians are trained in combination with the constantly fluctuating economy, physicians who are actually familiar with cost estimates and other details related to medical finances are something of a rarity.

“When I went to medical school, we didn’t talk about price at all,” she shared. “There was the academic notion that you just wanted to give your best medical advice to a patient. Of course, in the end, a physician needs to provide medical care. Now, in addition to that, you’ve got to be able to understand whether or not the patients that you serve can actually afford the treatment that you’re recommending.”

The AAMC’s Resources on Price Transparency and Value for Teaching Hospitals are not only easily accessible, but completely free to download and use.1 Although this compilation of resources is geared towards hospitals that are actively training residents, the collection could — and perhaps should — be utilized by any hospital that has yet to implement a system to maintain price transparency.

Present-day society is no longer a society that is content with a lack of information regarding finances. “More and more, the public is demanding price transparency,” said Orlowski. “You see states and other governments insisting that there be some transparency to the cost of healthcare. This is what people are asking for.”


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Sarah Sutherland
Sarah Sutherland

Sarah Sutherland is a staff writer at ADVANCE. Contact:

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