Lawmakers to mull bills aimed at boosting price transparency

A House panel plans to take up a trio of bills aimed at increasing transparency and clarity in healthcare pricing, tackling an issue that has bedeviled the industry for decades and handcuffed efforts to turn everyday people into better purchasers of care.

“In order for people to make informed decisions and to be their own true consumer advocate in the purchase of healthcare, they have to be able to go somewhere to get valid information about cost, price and quality, too,” said Rep. Michael Burgess (R-Texas). “Cost and price are not the same thing, and there are very few places to go to get this.”

Burgess, a physician who sponsored one of the bills in front of the Energy and Commerce health subcommittee, said that the lack of cost data is one of the factors that have so far handcuffed consumer-centric healthcare programs.

One bill, introduced by Rep. Steve Kagen (D-Wis.), also a physician, requires hospitals, doctors, nurses, pharmacies and a range of manufacturers and vendors to openly disclose prices. Failure to do so would result in a financial penalty to be determined by HHS.

Another bill, a bipartisan package steered by Rep. Joe Barton of Texas, the senior Republican on the Energy and Commerce Committee, also aims to lift the veil on costs and charges.

Barton's bill requires public and private health plans to make known what services are covered, restrictions in coverage, cost-sharing requirements and participating providers. Two years out, it would require hospitals and ambulatory surgical centers to publicly disclose the charges for services they typically performed. Quality information would also be paired with the other measures.

Burgess' bill requires state Medicaid programs to disclose charges for hospital services and requires health plans to provide their enrollees cost estimates.

Taken together, the bills attempt to give individuals the important information they need to choose where to go for care and how much they can expect to pay once they get there.

Walter Rugland, chairman of the board for three-hospital ThedaCare, a hospital and physician system based in Appleton, Wis., called price transparency the key to the economic wellbeing of the healthcare sector. His company was one of the first in the state to post the cost of care for, say, a knee replacement.

“Seven years ago, we said that the future of sustainable healthcare is going to require that the patients be involved in deciding where to go and what to have done, and that all healthcare is not the same and all prices are not the same,” he said.

Rugland is scheduled to testify in front of the congressional panel, as well.

Even with the promise of better-educated consumers, there are still uncertainties with making the medical dollar amounts widely available. It's unclear whether doing so would drive down costs for those hospitals at the higher-end of the spectrum, or have the opposite effect, with systems at the lower end instead boosting the prices of their services.

There's also a real question as to whether the general public would make use of such information even if it is made widely available.

“They're not looking at it yet,” Rugland said.

Steven Summer, president and CEO of the Colorado Hospital Association and a scheduled panelist for the hearing, said the healthcare system in its current form makes it difficult to post accurate and meaningful pricing information.

Summer said physician costs, rates that are negotiated by insurance companies and other pricing formulas combine to cloud the actual cost of care—obscuring the information that a rank-and-file patient would find handy.

“It is, frankly, very difficult to do anything other than averages,” he said.

Still, Summer said that it is a task best left to the states. Already, about 10 states have transparency laws on the books.