Health Prices Are Getting More Transparent, but It’s Still Not Enough, Experts Say

—
Price data need to be specific, searchable, and easy, according to one expert

by
Joyce Frieden, Washington Editor, MedPage Today
November 20, 2024

WASHINGTON — Health transparency rules have helped researchers gain more insight into hospital pricing practices, Ge Bai, PhD, CPA, said here Wednesday at an event sponsored by Georgetown University’s Center on Health Insurance Reforms.

The price transparency regulations that were part of the Affordable Care Act (ACA) “gave us unprecedented insight into what’s really going on in the commercial market,” said Bai, who is professor of health policy and management at Johns Hopkins Bloomberg School of Public Health in Baltimore.

For example, in a research letter published in 2023 in JAMA, Bai and colleagues analyzed price data that hospitals were required to post under the ACA transparency rule and found that “in the same county, the hospital-based colonoscopy [price] is almost 50% higher than the same service in a physician practice,” she said. Prior to the transparency rules, “we could not have such granular data.”

Bai and colleagues also compared price differences between physician-owned hospitals and non-physician-owned hospitals and found that physician-owned hospitals charged an average of 30% less for the same service compared with their non-physician-owned hospital competitors, she said.

The researchers also found substantial variation in payments to individual hospitals, even when the payments were coming from the same health insurer. “Let’s say it’s Johns Hopkins [hospital] and Blue Cross Blue Shield,” she said. “Blue Cross Blue Shield has multiple plans, right? We found that within the same hospital and the same insurance company payer, the variation can be two times — if one plan pays $100 [for a particular service], the other plan pays $200. That tells us many insurance companies are not doing their job.”

States have become more active in requiring healthcare entities to be more transparent about their pricing, said Hemi Tewarson, JD, MPH, executive director of the National Academy for State Health Policy. “Since 2017, 24 states have enacted 38 laws requiring prescription drug supply chains to report information on drug prices,” she said, adding that requirements vary from having manufacturers report price increases and launch prices or new drugs above certain thresholds, to wholesalers being required to report on cost and volume, to health plans reporting on the most frequently prescribed and the most costly drugs they cover.

In addition, “there’s also 19 states that have enacted laws requiring PBMs [pharmacy benefit managers] to report information on drug coverage and other benefit management information. And there are a number of states that have passed a lot of PBM reform bills,” something Tewarson said she expects will continue into 2025.

Anthony Wright, executive director of Families USA, a healthcare consumer group, said the lack of transparency “drives consumers nuts. This is one of the few areas of public life where you can’t go and get the price for the service that you need.” And while the number of uninsured Americans is decreasing, “there are an increasing number of people who are underinsured, who have these high-deductible health plans or are otherwise exposed because they have co-insurance or other [payments] … These prices actually do matter to their very life — to their budget, to whether they can make the rent, and whether they can pay for groceries.”

Although transparency is improving, it’s still not enough, Wright said. “We need to have a better handle on this.” He noted that the “machine-readable” pricing data that hospitals are required to produce “is not what normal people need. In order for something to be ‘shoppable,’ it needs to be specific, and it needs to be searchable. It needs to be easy.”

And patients need to have some skin in the game if prices are to come down, said Bai. “We do not care if we spend other people’s money … If I don’t have skin in the game, if I cannot personally, directly benefit, I’m not going to care.”

Panelists at the event agreed that quality data was another element of healthcare services that needs more transparency; however, Bai urged caution about mandating more quality measures. “If we want to do a mandate, we should be careful because it could be counterproductive,” she said.