Recently, members of the United States of Representatives’ Energy and Commerce Committee Subcommittee on Health held a hearing on “Lowering Unaffordable Costs: Examining Transparency and Competition in Health Care.” Present at the hearing were Chris Severn, Co-Founder and CEO of Turquoise Health; Matthew Forge, CEO at Pullman Regional Hospital; Marilyn Bartlett, Senior Policy Fellow at the National Assciation of State Health Policy; Sophia Tripoli, Director of Health Care Innovation at Families USA; and Dr. Benedic Ippolito, Senior Fellow in Economic Policy Studies at the American Enterprise Institute.
During her opening statement, Energy & Commerce Chairwoman Cathy McMorris Rodgers noted that “improving price transparency in our health care system is one way we can drive down costs” and called it “foundational to restoring the doctor-patient relationship.” She also stated that “patients shouldn’t be in the dark until after they receive care and their bills come” and called for “stronger enforcement from CMS.”
Health Subcommittee Chair Brett Guthrie noted that “rising costs of care for individuals is one of the single greatest threats to the overall economic security of Americans” and that the rising costs have “coincided with a sharp rise in consolidation within the health care industry.” He said that during the hearing, he wanted to “better understand these trends,” part of which he believes “can be achieved through greater price transparency in the health care system.”
During the hearing, Congressional members asked witnesses for ideas on how to improve hospital compliance with the Price Transparency Rule. In response, lawmakers received a variety of responses, including Congress codifying the price transparency rule. That response was offered by Sophia Tripoli, who also suggested that despite a monetary penalty for noncompliance, hospitals are not incentivized enough to provide the information required by the rule.
Chris Severn opined that there needs to be additional guidance on standardization on how hospitals are expected to submit the files. His company, Turquoise Health, is a startup that creates databases on the pricing data, and with more than 5,100 hospitals in its database, the company had to “write over 1,000 unique programs to bring that data in.”
Matthew Forge highlighted the progress his hospital made in transparency going back to 2019, when the hospital “published a price estimation tool, list of patient prices and a charge description master portal” on the hospital’s webpage. He said that when pulling together the pricing information and comparing themselves to other hospitals in the regional area, they found that there were several services that were “priced much higher than our competitors” which gave them the opportunity to “investigate how we lower our costs for medical devices and components so that we could pass that savings to patients.”
Marilyn Bartlett highlighted the importance of data and access to transparent pricing information in her testimony, citing several instances of significant cost savings in the medical arena for patients, taxpayers, and employees alike. She implored Congress to take action, saying that “the current health care industrial complex benefits from opacity and information asymmetry,” and price and cost transparency are critical in helping to lower health care costs.
Benedic Ippolito opined that “increasing transparency and competition within health care will improve market functioning.” He suggested that the increase in mergers and acquisitions in the health care industry is harmful to patients and suggested several polices to improve the oversight of consolidation. He also discussed another hot topic, the lack of transparency around pharmacy benefit manager (PBM) contracts, as well as unintended consolidation incentives within the 340B drug discount program.
The Centers for Medicare and Medicaid Services (CMS) warned almost 500 hospitals about their lack of compliance with the price transparency rules. Additionally, the fee for noncompliance was raised from about $100,000 per year to more than $2 million per hospital. We have written about several of the fines that CMS has levied against noncompliant hospitals.