Why Are Healthcare Costs So Confusing?

Consumers are beginning to want more control over healthcare costs


Consumers have come to expect simplicity and transparency in their day-to-day transactions. In response, providers across almost all industries have refined their procedures, deployed consumer-friendly technologies, and embraced more customer-friendly interactions. In my most recent YouTube video, I ask the question, 'Why then, are healthcare costs still so confusing?'

While every other industry offers easy price comparisons and more transparency than ever, details of healthcare costs remain opaque. Costs often vary wildly for the same procedure and the amount consumers must pay will also vary depending on which insurer or government program is paying, how much deductible has been met, whether you are being assessed in-network or out-of-network rates, and dozens of other variables. These factors convolute healthcare costs to the point where it seems no people ever pay the same amount for the same procedure. On top of the complexity is, of course, sticker shock from rapidly rising insurance rates, and the inherent difficulty involved in comparison shopping.

In other industries, incorporating transparency and simplicity into transactions is no longer something companies do to get ahead of the competition, it is simply a market expectation. This is especially true as younger, more tech-savvy consumers become more accustomed to instant information. While most healthcare organizations struggle to bring meaningful price transparency to consumers, they must do so as costs spiral out of control, competition increases, and government regulation and the ACA face ongoing changes.

Consumers are beginning to want more control over healthcare costs, as rising costs force consumers to pay attention to their financial health as well as physical health in controlling their healthcare expenses and managing their bills.

Granted, it is more difficult to explain a healthcare bill than it is an invoice for a pair of shoes – but the expectation is there nonetheless, and the healthcare industry must respond.

Consumers have a normal set of expectations for day-to-day transactions outside of healthcare. When they buy something from Amazon.com, they know what they’re getting and what it costs, when it will be delivered, and whether other companies might be selling it for a lower price. Yet in healthcare, there is no visibility into price and payment options. This is compounded by the complexity of healthcare billing, which is often so convoluted it can only be understood by a healthcare professional, leaving consumers unable to verify what they are being charged is correct.

Unreadable statements, uncertainty over terms, and tracking things like deductibles, all cast a shadow over healthcare cost visibility, and this becomes increasingly problematic as patients become more financially responsible for their care. High deductible health plans and health savings accounts may have some advantages, but these innovations mean that healthcare consumers are increasingly taking a more direct role in paying for healthcare. But the problem is that they simply don’t understand what they are paying for. Unlike paying for a purchase on Amazon.com, patients are more often left to simply trust the provider’s billing to be correct, and pay what’s on the bottom line without question.

As patients shoulder more of the financial responsibility for their healthcare, it is increasingly important for patients to know and understand what they are paying for. It is up to providers now to provide that level of transparency and access.

The benefit to the consumer is obvious in terms of better understanding their healthcare bills, and maintaining better control over healthcare spending. The benefit to providers may be even greater. By providing consumers with more transparency about their bills, consumers are better able to know what to expect, and better able to plan for healthcare expenses – and as a result, they are more likely to be able to pay those bills on a timely basis.


Chase Titensor is a manager at Top Tier Consulting (T2C), a premier healthcare management consulting firm that provides world class consulting for major healthcare organizations. Chase also serves as communications chair for The Utah Chapter of the Healthcare Information and Management Systems Society (UHIMSS).

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