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California Receives Failing Grade for Health Care Cost Transparency

California was one of 45 states to receive a failing grade for health care cost transparency, according to the third annual report by the Catalyst for Payment Reform and the Health Care Incentives Improvement Institute, Modern Healthcare reports.

For the CPR-HCI3 report card on state price transparency laws, researchers looked at legislation enacted in the prior year. The grades do not reflect pending legislation.

Details of Grading

New Hampshire was the only state to receive an "A" grade. The state's grade increased from an "F" after it launched a consumer-focused price transparency website (Kutscher, Modern Healthcare, 7/8). Last year, no states earned an "A" (Budryk, FierceHealthFinance, 7/8).

The four other states that received passing grades in the latest report card were:

  • Colorado, which received a "B";
  • Maine, which received a "B";
  • Vermont, which received a "C"; and
  • Virginia, which received a "C" (Modern Healthcare, 7/8).

All five states that passed have health care price transparency laws.

Reaction

HCI3 Executive Director Francois de Brantes and CPR Executive Director Suzanne Delbanco said that while a large majority of states performed poorly, New Hampshire's progress suggests that states can boost their scores with a small amount of effort. According to the report card, New York and Connecticut are working on creating all-claims databases, and Washington state and Maryland are pursuing transparency initiatives, as well.

De Brantes and Delbanco also said state price transparency efforts can face challenges from lobbying efforts. "Many won't [pass] due to pressure from providers, payers and other suppliers to the industry who still benefit from price opacity," they said in a statement, adding, "That pressure often rests on spurious arguments about price as a trade secret and/or the potential for a state law on price transparency to violate contracted terms between payers, providers and suppliers -- arguments legislators and the media often accept" (FierceHealthFinance, 7/8).

Meanwhile, Mark Grube, a managing director at Kaufman Hall, noted that consumers have started comparing price information, particularly when it comes to commodity services such as lab work, elective surgical procedures and imaging. Grube said, "There's lots of evidence that people are, in fact, shopping," adding, "They're going online, they're doing research. Those providers that are higher-cost will have to prove their value" (Modern Healthcare, 7/8).

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