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Inside Seema Verma’s Battle for Health Care Price Transparency
During her time as administrator for the Centers for Medicare and Medicaid Services, Seema Verma had one clear goal for the American healthcare system. “Our goal from the start was to ensure all Americans have access to affordable care while improving or maintaining the world-class standard of quality they are used to receiving,” she explained in 2021. But to make that possible, Verma knew that costs would have to remain competitive. She recognized that to make that happen, free market principles such as cost transparency would have to enter the conversation, even as needs-based health plans remained firmly under government control and regulation.
One of the reasons why the free market works is that consumers have clear choices regarding the brands and businesses with which they choose to engage. Verma believes that, for Medicare and Medicaid to function optimally—both for patients and providers—that same clarity had to be available in the healthcare space.
To that end, Verma established new rules to require price transparency in the healthcare system. “For years, prices have been intentionally hidden from patients at the point of purchase, inhibiting the competitive forces that drive down costs,” she said in 2021 as well. During her time in office, sweeping new regulations came into effect, mandating price transparency in hospitals, with further efforts “requiring most health insurance issuers to provide their enrollees with a customized tool that provides them with cost-sharing information unique to their plan, and to publicly post certain payment rates.”
Seema Verma: Patients Will ‘Enjoy the Coordinated, High-Quality Care That Will Result’
Immediately, these reforms made it simpler for patients to understand the exact costs they’d incur when electing to undergo any procedure at any hospital. However, Verma recognized that even with more straightforward cost information, patients might remain tethered to overpriced care due to how existing privacy regulations placed barriers on their ability to transfer health records to new providers.
Undeterred, Verma pushed ahead with further reforms during that time. “Under our policies, a large portion of American patients will be able to travel from insurer to insurer, or from provider to provider, and to take their medical records with them right on their phones,” she said. “Rather than having to jump through interminable bureaucratic hoops to obtain their data—data that belongs to them—, they will be empowered to share it directly with their doctor with the click of a button and enjoy the coordinated, high-quality care that will result.”
Transparency leads to competition
Seema Verma held that once patients could ascertain their cost of care, hospitals and doctors would be motivated to lower the price of their services. However, she wanted to ensure that, in doing so, the quality of care wouldn’t suffer. And to facilitate that shift, she instituted reforms that would reorganize the very ways in which providers were reimbursed for their services.
As she explained, “Our policies allow surgery centers and hospitals to compete fairly by providing payment for a range of procedures in surgery centers, rather than limiting payment for such procedures to an outpatient hospital setting. As a result, doctors and patients can be the primary decision-makers about where care is administered without unnecessary government meddling. The result will be hospitals and surgery centers vigorously competing for patients’ business based on cost, as well as more affordable, high-quality alternatives for patients that reduce their out-of-pocket costs.”
At the same time, Verma went to work dismantling what she described as “an ineffective fee-for-service payment model, under which providers are reimbursed for the number of procedures they administer.”
‘Value-Based Care’
Recognizing that this model incentivizes poking and prodding, thereby driving up costs without improving patient outcomes, Verma implemented reforms designed to tip the scales. She said, “Value-based care, which bases payment on results—maintaining or restoring patients’ health while rewarding providers for lowering cost—is widely considered to be the solution to this problem.”
Perhaps most importantly of all, Seema Verma wasn’t content to implement these reforms for the betterment of Medicare patients. Instead, she also sought to integrate Medicaid into the shift to value, saying, “For too long, the program had been mostly neglected in such efforts.”
“We released guidance replete with value-based strategies state Medicaid directors [could] use to drive value in their programs and to address the social determinants of health.” Then, to speed up the rate of reform, she also made changes to the Medicaid drug rebate program, stating, “[These] will forge a path forward for value-based payment for the new generation of curative treatments in the private market as well as Medicaid. That’s because we recognize how important it is for the healthcare system to march in lockstep together down the road to value.”
During her time in office, Verma said her office made “historic strides away from a fee-for-service system that limits reimbursement to what can happen between the four walls of a doctor’s office. They have brought us closer to a payment structure that rewards lower costs and better health outcomes.”
And, while some of those strides forward haven’t remained in place after her exit from government, by continuing her work as an advocate for health care reform, Seema Verma is determined to build a future in which optimal patient outcomes exist in a price-transparent health care system guided by user choice and an ongoing competition for excellence.
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