Utah legislators passed the Consumer Protection for Cannabis Patients act, also known as SB0170S02, during the 2021 legislative session. The law required several changes to how the state’s medical cannabis program is administered. One such change, designed to increase transparency, was implemented in December. The rest of the country can learn something here.
The change in question was realized through a survey sent to all qualified medical providers in Utah. Providers were required to complete the survey and submit it to the state. Completing the survey meant providing a range of important information, including a provider’s fee schedule.
Collected information is now published in a state database accessible by anyone willing to visit the website. Patients can search for providers by name, address, and other criteria. They can see exactly what providers charge for their medical cannabis services.
The main goal of this particular provision was to increase transparency for patients. Unfortunately, patients almost always pay for their QMP services out-of-pocket. That is because few insurance companies cover medical cannabis visits. Likewise, providers are reluctant to bill insurance companies for fear of getting into trouble.
Equally unfortunate is that Utah’s system has created a certain number of ‘pot doctors’ only interested in running medical cannabis card mills that generate significant revenues. Patients are left high and dry paying expensive fees out-of-pocket.
How does the new transparency provision help? By allowing patients to shop around. They do not just have to accept excessively high fees from the first provider they find. They can shop around and compare prices to their heart’s content.
Shopping for Pharmacies
Likewise, patients can shop around for medical cannabis pharmacies too. Unfortunately, there are fewer than twenty pharmacies serving the entire state. The Beehive Farmacy locations in Salt Lake City and Brigham City are two of them. But now that the state has approved home delivery, patients have more options available to them. That should help control prices somewhat.
Application to All of Healthcare
Utah’s move toward medical cannabis transparency was implemented almost out of necessity. The fact that people pay for their provider services and cannabis medicines out-of-pocket stipulates the need for them to shop around and compare. But guess what? The move has applications for all of healthcare.
One of the biggest challenges of our system is that services, procedures, and prescription drugs cost so much. Most consumers have no idea just how high prices really are because they never see what providers bill to insurance companies. All they see are their co-pays.
Require patients to pay up front before seeking insurance company reimbursement and everything changes. Knowing how much services and procedures cost is motivation to shop around. But in order to facilitate such a scenario, providers would have to be compelled to publish detailed rate schedules on a regular basis.
Set Up for Failure
The health insurance system so many of us are familiar with was set up for failure from the very beginning. Just like Utah’s medical cannabis system unintentionally paved the way for creating pot doctors and card mills, our insurance system has paved the way for out-of-control costs and medical insurance premiums.
What Utah has done with medical cannabis transparency would work well if applied to all of healthcare. Greater transparency would not completely control prices on its own, but it would go a long way toward accomplishing that goal. Combining transparency with out-of-pocket payments offers the two most important things you need to prevent price gouging. Utah lawmakers are smart enough to know it works. What about everyone else?