Earlier this year, the United States House of Representatives Ways and Means Committee held a hearing on price transparency in the healthcare industry and whether it makes a difference in health care for patients around the country. Democrats and Republicans on the committee were split on how effective price transparency is in lowering health care costs.
Ways and Means Committee Chairman Jason Smith stated that “price transparency works” and that “In the past 20 years, the prices of medical services increased by 130 percent. Meanwhile other shoppable commodities like TVs for example decreased by nearly 100 percent. Transparency and competition deliver better results. We have seen the price of shoppable health care services, such as Lasik eye surgery, decrease by 20 percent over 15 years, while innovation and quality have increased. That’s not a coincidence.”
Republicans seized on the fact that many hospitals are not in compliance with the price transparency rules that require a machine-readable file of standard charges for their items and services. The Centers for Medicare and Medicaid Services (CMS) has fined only less than a handful of hospitals for non-compliance, but reports are that many more are also lacking compliance with the rule. Representative Michelle Steel of California called CMS out, saying, “CMS has largely failed to hold the hospitals nationwide accountable for compliance.”
Christopher Whaley, PhD, a hearing witness and health economist at the RAND Corporation, noted that the federal government could take a page out of Colorado’s book. Colorado recently implemented a policy that prevents hospitals from being able to pursue patients for medical debt if they do not publicly post price information. Whaley also noted that regulators could require compliance with the price transparency requirements as a condition to participate in Medicare.
Representative Richard Neal of Massachusetts, however, noted that “we should not pretend, however, that transparency and shopping alone is the magic of the marketplace,” and that it is likely that additional measures are needed to make sure “that consumers actually have access to affordable, dependable, and comprehensive coverage.”
Rick Gilfillan, MD, former deputy administrator at CMS and former Trinity Health CEO seemed to share those sentiments, noting that he did not believe the assumption that if we give patients pricing information, they will respond as “logical economic actors” in a well-functioning marketplace, thereby lowering costs and improving outcomes.
Other topics covered in the hearing included health savings accounts and high deductible health plans, with some members of Congress claiming that these avenues decrease the overall cost of health care and others claiming that they help to perpetuate disparities and increased medical debt.
Kendy Troiano, human resources director the Clark Grave Vault Company, noted that the company had a 35% premium increase by its health insurer, which led the company to switching to Sidecar Health, a fixed-indemnity health plan that offered coverage with only a 10% increase. Ms. Troiano noted that “their plan allows us the freedom to choose any licensed provider who accepts cash or a credit card because we are not constrained by networks, formularies, or prior authorizations.” She went on to note that they are given a “budget or benefit amount for any medical need and that allows us to choose a provider based on that budget.” The patient then has the ability to stay within the budget or pay out a little bit more.
Other witnesses present at the hearing included Dr. Ron Piniecki, Co-Founder and Medical Director of Wellbridge Surgical; Mr. Bill Kampine, Co-Founder and Chief Innovation Officer at Healthcare Bluebook; and Mr. William Short, Executive Chairman at Ameriflex.