Physicians Need To Fight for Increased Transparency in Healthcare - Here’s How.

Large hospitals and medical systems do all they can to keep the cost of their various services under wraps.

Large hospitals and medical systems do all they can to keep the cost of their various services under wraps.

Currently, there is virtually no transparency in healthcare and little has been done to change this situation.

But there should be something done about it -- and physicians should act to advocate for these changes.  In fact, there is growing pressure from patients, healthcare advocates, and government officials to make healthcare more transparent. In this article, I want to discuss the problem and what to do about it.

First of all, transparency means different things to different segments of the healthcare industry and to consumers.  For patients, this means having more access to information about the price and quality of healthcare services which can help to make better decisions about care. In their article The Key to Overcoming the Challenges of Transparency in Healthcare”, Bobbi Brown and Luke Skelley, a senior VP and sales VP at Health Catalyst respectively, point out that the problem is that patients rarely know the real cost of their health care until after they receive it, and that this price can vary greatly for different providers. Consumers want to know but struggle to understand their true out-of-pocket costs and where they can get the best care for their money.  They also don’t often know if their insurance will cover a test or drug ordered by their doctor, and if it doesn’t cover their costs, why it does not.


Physicians also have a good reason to push for transparency. While physicians have an explicit financial responsibility for the quality of care only in accountable care systems and not in fee-for-service systems, it’s still safe to say that all physicians want to do the best for their patients. That means knowing which potential referral partners have demonstrated the best outcomes for their patients. These partners can include large hospitals and medical systems, which are the biggest offenders in not being transparent. In fact, according to the AMA’s Code of Medical Ethics, “physicians have an obligation to inform patients about all appropriate treatment options, including the risks and benefits of alternatives,” and that includes knowing about the payment models and costs of care.  However, if this information is not transparent to the physician this can interfere with the communication between the patient and physician, which can “undermine trust, patient choice, and quality of care”.

Unfortunately, the cost of healthcare is one of the biggest mysteries today and the large hospitals and medical systems do all they can to keep the cost of their various services under wraps.

Hospitals and large medical groups spend millions advertising themselves, but they don’t advertise their  prices .

Hospitals and large medical groups spend millions advertising themselves, but they don’t advertise their prices.

For example, when was the last time anyone saw a hospital advertise its prices? They don’t do that.  

As a result, when patients go to a hospital for tests or treatment, usually at a referral from a physician, they are totally in the dark about what the cost will be or what their insurance from one or more providers will cover.

For example, patients may have some payment from Medicare if they are 65 or older, other payment from a supplement plan like Blue Shield or Anthem, and then a deductible or co-pay.  But plans vary, so it is no wonder patients are confused, and commonly physicians don’t know what these costs or coverages involve. They just write up the referral and the patient takes it from there.  In short, as Maria Castellucci and Shelby Livingston point out in a Modern Healthcare article “Achieving Transparency in Healthcare”:

“For the most part, consumers remain in the dark about what they will be asked to pay after visiting a primary-care doctor or undergoing an inpatient procedure.”

In that way, healthcare is different from every other aspect of the consumer experience. One can even leave a broken car with a mechanic and expect a cost estimate, but a patient doesn’t get that when going to a hospital for further treatment or tests.

Meanwhile, advertisement campaigns from big health systems only add to this problem as the hospitals and medical providers tout their great services.  Doing so is perfectly fine since most systems do have excellent facilities. But these ads are misleading since they don’t talk about or tell the truth about pricing.  

Why don’t they? One reason is that costs are sky-high and inflated.  Certainly, there are good reasons for these high prices such as the hospitals’ need to take into account uninsured patients and stay open 24/7 in most cases.  Plus, drug fees are in the stratosphere because of high research costs for effective drugs (though these costs are usually inflated, too, especially for some hard to obtain drugs). Yet, while some of these high costs might be appropriate, what is lacking is that both physicians and patients often are not informed what these costs actually are as high or low as they may be.

In turn, this lack of transparency is clearly bad for patients since revealing the truth would show the high costs of going to a hospital.  It’s just too expensive, so if every single patient was an informed patient no one would EVER use a hospital facility for anything but an emergency surgery or care for a very serious illness, because most services such as getting an MRI, CT scan, or lab work, would cost less than half as much if done at an independent or private facility.

This lack of transparency is also bad for physicians since it makes them look ill-informed and incompetent because they don’t know what such services cost when they refer patients.  And when patients ask about pricing, physicians can only say they “don’t know”.

This lack of transparency has to change.  How?

First, physicians should finally advocate for patients and demand that prices be posted if they are going to make any referrals to a facility.  Physicians should NOT refer patients anywhere where there is unclear pricing structure or ambiguity.

Second, patients need to take responsibility by learning and understanding how their health coverage works.  They also need to start asking hard questions of hospitals, doctors, and the health care system to find out what is really going on.  They should additionally read articles or their insurance policies to know what the true costs are and what their coverage includes.

Now complaining by itself is no longer good enough! 

We need to start at the root of the problem to order to fix a broken system by seeking more transparency and that could pave the way to lower costs.  

And we need to start now.


alec profile.jpeg

Alexander Lakowsky, MD MBA

With more than 14 years of clinical experience in medicine, Dr. Lakowsky is an internal medicine physician running his own private practice in the SF Bay Area, creating a thriving professional medical environment that is advantageous for both doctors and patients.

After seeing a lack of business understanding among medical professionals in the various practice settings in which he worked, Dr. Lakowsky founded Reimbursement Rx to help physicians better understand how they get paid and to teach them how to navigate the complex business side of medicine to maximize quality patient care, compensation, and job satisfaction.