A catalyst for affordable healthcare

The Hospital Price Transparency Rule, introduced by the Department of Health and Human Services four years ago, requires U.S. hospitals to disclose their fees, commercially negotiated prices and cash prices. The aim is to stimulate price competition and curb health spending. So what have we learned?

As my co-authors and I discussed in Frontline health matters This week, compliance remains incomplete and the agency’s enforcement efforts need to improve. A November report from PatientRightsAdvocate.org found that only 21% of hospitals were in full compliance with the rule.

Still, a recent analysis by Türkis Health found that average commercial prices for common hospital services have fallen since the rule’s implementation, underscoring the promising potential of price transparency to curb price increases.

The price data disclosed also revealed significant price differences that can inform policy and practice. For example, prices at medical hospitals are a third lower than competing hospitals in the same market. Hospital prices for colonoscopies are more than 50% higher than those at outpatient surgery centers in the same county. Additionally, cash prices are often lower than insurance negotiated prices, even for non-purchasable services such as trauma activation fees.

It is worth noting that healthcare services and products not covered by insurance, such as: B. plastic surgery and over-the-counter medications that disclose prices in the most patient-friendly manner without government regulations. If we want the price transparency rule to achieve its full price containment potential, we must address the root cause that prevents hospitals from voluntarily disclosing prices in the first place.

The reason is that many patients cannot benefit personally and directly from lower prices. Nobody cares if they spend other people’s money. Even when pricing data is available, skinless patients have no reason to care. Since providers understand this, they conveniently hide and increase prices. Therefore, reforming insurance regulations that allows patients to benefit from lower prices is the way forward.

The unequal competitive conditions in the provider market must also be addressed in order to enable fair competition. Anticompetitive regulations—such as the 340B Drug Pricing Program, location-based payment policies, the physician hospital ban, certificate of need laws, public benefit certification laws, and the Stark Law—undermine the competitiveness of physicians and significantly encourage their acquisition systems.

When policymakers put their thumbs on the scale to pick winners and losers, the process becomes influenced by large players, harming competition and patient well-being. In contrast, free competition, which gives all patients the opportunity to decide winners and losers, is the antidote to high prices and poor quality, both of which are contrary to their interests.

Price transparency has strong support from both parties and is widely supported by voters because it simply makes sense. It is a necessary catalyst to advance the transformation of our health care system into a competitive, fair, and patient-centered system that leverages American momentum to organically address unsustainable health care spending.

Congress should codify price transparency by adopting the more effective and comprehensive version proposed in the Senate. Accompanied by reforms that align incentives for patients and level the playing field for providers, a bright and healthy America could be on the horizon.