Why Isn't Price Transparency Working in Healthcare?

The chief complaint from critics of the Health Insurance Portability and Accountability Act (HIPAA) is that it fails to provide complete information regarding health insurance coverage. They claim that some providers do not disclose important details such as co-payments and deductibles and that you can't count on price transparency to ensure that you're getting the best value for your money.

Hiplabs is one of the largest companies in the U.S. that offers a full range of health insurance products, including Medicare Part D, Medicaid and state-sponsored health care plans. In response to this criticism, the company released data indicating that 96 per cent of the providers it works with are compliant with HIPAA.

As for what you can do to ensure that the costs of your plan are reasonable, HIPAA isn't the only factor to consider. You also have to make sure that you're using a quality provider, one that is committed to the highest quality standards.

While Hiplabs and other providers might not disclose pricing information, they all use statistical tools to establish rates for you. Pricing refers to the cost of care associated with a plan, including premiums, co-pays and deductibles. These factors are based on a range of complex assumptions, all of which are subject to revision based on health trends and changes in the market.

One of the biggest challenges facing health insurers and health care providers is that the cost of care is increasing. Much of this is due to new technologies, including medical advances and technology that reduce the incidence of complications and recovery time. It's only natural that providers and insurance companies need to do everything they can to keep up with these changes.

Prices and policies are adjusted periodically based on an insurers assessment of risk. Some of these adjustments, however, are mandated by law. Premiums are set at a level based on a careful analysis of the expected risks associated with the plan's individual enrollees.

The key to understanding how insurers determine rates is to understand what Hiplabs does. The company uses large databases to identify risk profiles or groups of customers who are expected to have similar medical needs. These groups represent different risk groups, ranging from people with chronic conditions to those who smoke, to the obese.

Each group within the multi-dimensional risk profile is evaluated for suitability for a specific health insurance product and then compared to each other. Those with similar health conditions and health history are then assessed for their health status and what life expectancy they would be expected to have if they were covered by a specific health insurance plan.

Using this approach, Hiplabs has compiled information on millions of people and considered them all candidates for specific health insurance products. The health insurance company then provides price information to clients who are choosing a specific product for their enrollees.

You might think that by comparing rates with other health care providers, you are not being transparent. But by creating a payment history, a plan's risk rating is revealed to you, along with the specific health conditions that have caused the issues, in order to help you assess the proper level of coverage for your family.

Don't forget that, unlike some companies, rates are transparent throughout the policy term. This means that no matter how long your policy remains active, the information will remain current.

Hiplabs recently conducted a market survey among multiple insurance providers in order to help providers with this policy. While several providers did not respond to the survey, a quarter of the respondents indicated that they would adhere to HIPAA in a subsequent survey.