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Ohio to Require Medical Provider Price Transparency in 2017

September 12, 2016

In January 2017, a law will take effect requiring health care providers to provide patients with written estimates of charges, the portion insurers will pay, and the patient's portion, in most cases.

Ohio will require health care providers to supply patients with written cost estimates before delivering nonemergency products, services, or procedures, starting in January 2017.

The law states the estimates must disclose the amount the provider will charge the patient or patient’s insurer, the amount the insurer will pay, and the difference, which is charged to the patient. To help providers comply, the law requires commercial insurers and the state Medicaid director to give pricing information to providers upon request.

The legislation was signed into law by Gov. John Kasich (R) as an amendment to House Bill 52 in June 2015. The law’s price transparency portion is slated to take effect on January 1, 2017.

‘Clear Signals’

State Rep. Robert Sprague (R-Findlay), a cosponsor of the legislation, says requiring providers to show their math will help patients make informed and financially responsible health care decisions.

“We’ve put in a very simple, three-part price transparency requirement for medical providers,” Sprague said. “With those three pieces of information, people can determine what their cost is going to be and begin to make free-market-based decisions about purchasing their health care.”

Rea Hederman, executive vice president and chief operating officer at The Buckeye Institute for Public Policy Solutions, says the law will help patients maximize the value of their health care spending.

“Any marketplace needs to have clear price signals, and this is a step toward a more competitive, transparent market that will benefit consumers,” Hederman said. “Consumers will have more information as to the cost and value of health services [and] will be able to choose different options based on price.”

Rising Demand for Transparency

Patients increasingly want to know the price of care before they buy it, because they are paying more for health care than they have in the past, Sprague says.

“We can see that the market is beginning to change, and people in the private marketplace have higher and higher deductibles, if they even have health [insurance],” Sprague said. “You might have a $2,500 or $5,000 or even $10,000 deductible. Now that you’re paying that cost out of your pocket, you really want to know what it costs.”

Hederman says increasing price transparency will motivate providers and insurers to compete for patients’ business, slowing health care cost increases and leading to higher quality of care.

“Health care research shows that competition results in lower prices and better health outcomes for patients, who will get better health outcomes for their dollar,” Hederman said. “Providers will become more efficient as patients compare services. Over time, more competition and transparency in health care will slow the cost growth of health care.”

David Grandouiller (dgrandouiller@cedarville.edu) writes from Cedarville, Ohio.

Internet Info:

Ohio House Bill 52 with Price Transparency Amendment,” Ohio General Assembly, June 30, 2015.

Matthew Glans, “Health Care Price Transparency,” Research & Commentary, The Heartland Institute, March 11, 2016.

Author
David Grandouiller writes from Jamestown, Ohio.
dsgrandouiller@gmail.com