One of the major challenges facing US consumers is rising healthcare costs. The system is notorious for a lack of pricing transparency. Doctors, nurses, pharmacists are not able to answer basic questions about the cost to the consumer of the procedures they recommend to their patients.
The opaque nature of healthcare pricing is almost unheard of in a capitalist market. It is difficult to imagine an electronics store with a sales associate who can’t tell you the cost of a new television. Within a few minutes of typing a customer’s information and desired service level into a tablet, a sales person at a wireless store can accurately price out a cell phone plan.
But even for simple procedures or prescriptions, medicinal professionals can not easily estimate the cost to a patient. It is unlikely that a doctor talking to a patient about their hair loss prevention options can estimate the end cost to the consumer, after copay and other insurance adjustments, of a simple medicine like Viagra.
This fear of the unknown cost of treatment causes many consumers to self-ration healthcare. Even with a good insurance plan, the cost of a single visit can vary widely based on a number of factors that are difficult to calculate, like deductibles, what the patient’s insurance company has negotiated with the provider, and more.
Coupled with out-of-control healthcare spending inflation (on a per capita basis, health spending has increased over 30-fold in the last four decades, from $355 per person in 1970 to $10,739 in 2017.), it is no wonder that consumer self-ration important healthcare procedures and doctor visits.
Technology is attempting to combat these rising costs and lack of pricing transparency. Some companies, like Hims and Roman, are going direct to consumer with point solutions to treat specific illnesses. Others, like Sherpa Health (now part of Crossover), are revolutionizing patient interaction with doctors using telemedicine.
Will either of these models prove to be the catalyst the United States needs to improve our healthcare system and make it more patient focused and more transparent? Can they get costs under control and encourage citizens to use preventative care and afford better afford prescription medicines? The future is unclear and there are many hurdles ahead, but we are optimistic that the influx of new direct-to-consumer teleheath companies leveraging technology will improve price transparency.