Transparent medical networks provide cash for services, reduce burden on patients

A new startup is working toward increasing pricing transparency with hopes of reducing patients’ health care costs. Zero Card, a transparent medical network, allows employers to pay cash for services. According to the company, when patients use their card, hundreds of procedures are available with no out-of-pocket costs. Zero Card is able to offer this service due to the wide appeal of cash payors. Hospitals are more likely to set competitive prices if they know they will receive cash for services, and this process reduces administrative burdens of paperwork and collections activities. Patients and hospitals both benefit from the reduction of the payment cycle to about five days, as bills are paid once a week.


Prices that providers set for services are often unrelated to the actual cost of delivering the services, instead based on what the providers are able to negotiate from payors. Zero Card claims that their system results in services priced at half of what insurance companies recover, because members are able to see the cost before they choose where to go. Although Zero Card launched in November 2014, it received a boost when the St. John Health System in Oklahoma, the largest nonprofit health system in the country, joined. David Pynn, CEO of St. John, stated that these health systems need to join in the fight to lower health care costs, which means moving toward population health.

Pricing failure and transparent medical networks

Concerns about surging health care costs are nothing new, especially considering that affordable, cost effective care was the major push behind creating the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). Despite major changes in how insurance actually works and shifts away from traditional fee-for-service arrangements, Forbes notes that pricing failure, or a lack of correlation between price and quality, remains a pervasive problem. One thing that has worked to reduce surgery costs over the last few years in Oklahoma by 50 to a whopping 90 percent is simply posting the price of the procedure up front.

Yet simply showing insurance pricing is, according to some, not quite enough. This is where transparent medical networks, like Zero Card, come in. They not only show the costs of care in advance, but also majorly streamline the process. Patients no longer have to reconcile a pile of bills that make little sense coming from the same provider for the same procedure or even worry about co-pays. Forbes also points out that transparent pricing also works well for bundled services such as joint replacements and for providers like ambulatory surgery centers.

Uneasy providers

Not everyone loves the idea of price transparency. Blue Cross Blue Shield of North Carolina (BCBS) decided to release information regarding how much it pays certain providers for specific procedures. Some hospitals and health systems have pushed back against the idea, claiming that pricing is more complex than it appears. They have also expressed concern that patients may focus too much on price and less on the overall value of care.  As health care overall is moving toward an approach where patients are allowed to be advocates and have a louder voice in their own care decisions, some think that there is such as a thing as providing too much information. BCBS even noted that it could have provided even more information, but stuck to a number of procedures representing over 80 percent of nonemergency costs in order not to overwhelm consumers. Although the shift toward value-based care is still in early stages, information transparency is working to move it along as patients question what they’re actually paying for.