Travis Dalton and Jocelyn Jiang from MultiPlan explain why U.S. healthcare costs are hidden from patients. The system splits between government programs and commercial insurance, with in-network providers getting negotiated discounts while out-of-network care costs far more. Patients can't shop for care because they don't know prices beforehand, identical procedures vary wildly in cost, and most decisions are made for convenience, not value.
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I've been living in the US for eight years, but health care is still very mysterious for me. So just for the benefit of myself and for our audience, can you tell me what happens when someone gets a treatment? So who ends up paying who?
Yeah, well, you're not alone. I've been living here my whole life and it's mysterious to me as well. So. But you know, one of the things we're trying to do at Multiplan is kind of simplify and educate and demystify to some degree how the process works. But really there's, you know, there's essentially two kinds of health insurance in the U.S. so it's government funded, Medicare and Medicaid and then there are commercial insurance products. Typically those are borne by payers that bear the risk and or employers that are self funded that bear that risk. When someone has an issue or needs to see, you know, a provider or someone that's delivering care, they have the choice to go in network. And those network agreements are typically negotiated between providers and payers of healthcare and employers and sponsors. And then there's a pre negotiated discount or rate and that's a pretty easy path. I suppose most people are used to that, that have some method of insurance or they can. There's some out of network options that exist and there are some cases where an employer isn't inside of the network or out of the network where care is sought. And that's a very different path with a very different cost structure around it. So I can see where it's confusing. No doubt about it. But as I said, what we're trying to do is demystify the extent we can and also control and contain costs to the extent that we can as well.
Okay, so primarily insurance based and then you've got this difference between in network where it's like specific providers and then out of network where it's like, oh, you want treatment from someone else and maybe you have to pay a bit more. All right, so it sounds like a fairly elaborate system. What are the problems with this? Jocelyn, do you want to explain the downsides of the system?
Sure. Like Travis mentioned, it's fairly complicated. A few, I would say main problems with the US system for the average consumers. Number one, I would say the price is not transparent at the current level. It's not very easy to know how much you're facing out of your pocket prior to your getting the care in a lot of the situations. And also secondly, the price can be drastically different from provider to provider, even for the same exact procedure. That you're seeking just simple example like getting an X ray, getting an X ray in the hospital compared to getting an X ray in the imaging center. That price can different by 10 times or even more. And then third patient with the insurance, they typically only care about their portion of the out of pocket amount and have no idea of like that main risk barrier, whether it's the payer, which is the insurance company or their employers who is actually the risk barrier are actually paying for the service. So a lot of the times it's hard to educate the consumers or the patients to shop for the service that are shoppable. And then lastly, the patient decision making on the provider selections oftentimes is also less about quality or cost and more about how soon I could get that next appointment and how easy for me to get to that doctor. So that I think that's the area with the recent government requirement of price transparency, we are trying to help filling that gap is to help bring that transparency, helping to bring that cost information, quality information to the consumers, to the payers and providers so they can provide that information to the people for them to make a wiser decision prior or before they're like consuming the care.
Okay. So yeah, with that lack of transparency, it's very difficult to know how much you're being charged and where you're going to get the best price from. I guess there's no like price comparison service like you get for shopping sites. No equivalent for healthcare in general.
Okay.
All right. Travis, did you have anything to add to that? Are there any other problems? You see the system?
Yeah, I mean it's interesting. I mean there's, you know, the price for the same service can be different. So if you're going through a Medicare channel, it's a price. If it's in network negotiated, it's a price. If it's out of network, it can be a price. So part of what we're trying to do collectively with all the transparency data and with machine learning and other capabilities, is to essentially bring transparency to the table, but also evaluate those prices against some fair and reasonable basis and determine what an appropriate cost for something might be and bring that to the industry in a way that helps contain costs over time. And so there's a lot of challenges with that. I also served the provider and patient community for 22 years before I joined the CEO of MultiPlan. And you know, there's a lot of disparate data out there. You know, taking that data and normalizing it, making it useful, is something that's really important as it relates to healthcare, particularly in terms of bringing value, but also on the, you know, the patient provider side.
