Hearing Addresses Health Care Price Transparency
The House Energy and Commerce Subcommittee on Health on Wednesday held a hearing on the potential effects of increased "price transparency" for health care providers, CQ HealthBeat reports.
Supporters said that increased price transparency will help consumers make health care decisions and lead to reduced costs.
House Energy and Commerce Committee Chair Joe Barton (R-Texas) said, "Instead of a marketplace, we have a system that prevents patients from seeing how much their health care services actually cost. The health care system hides prices, and it blurs quality."
Former House Speaker Newt Gingrich (R-Ga.), founder of the Center for Health Transformation, added, "Health care is the only area of America's economy where the consumer and the provider have no idea what the good and services they trade cost."
Opponents said that increased price transparency will not address the issues of high health care costs and the uninsured.
Rep. Henry Waxman (D-Calif.) said that increased price transparency "is no substitute for real coverage," adding that individuals enrolled in group health plans receive lower prices than those who purchase health care on their own. In addition, he said that increased price transparency might shift more health care costs to individuals.
Paul Ginsberg, president of the Center for Studying Health System Change, said, "Consumers' experiences with markets for self-pay services ... have been romanticized and do not offer much encouragement as a model of effective shopping for health care services."
Rep. Sherrod Brown (D-Ohio) also said that increased price transparency should include health insurers and pharmaceutical companies, as well as providers (Carey, CQ HealthBeat, 3/15).
In related news, the Washington Post on Friday examined the Bush administration's plan in the coming weeks to post online the prices that Medicare pays for common medical procedures. The published rates are part of a larger initiative to disclose price and quality data from hospitals, a plan the administration says will allow consumers to compare prices at different hospitals and decrease costs.
In the next few months, the government also will post online rates negotiated by the Defense Department, the Federal Employees Health Benefits Program and private health plans in six communities.
CMS Administrator Mark McClellan said hospitals will be required in 2007 to release mortality data on common illnesses, such as heart attacks and infection.
According to the Post, some advocates for the poor say the published prices "will pressure hospitals to give uninsured patients the discounts provided to people with insurance."
HHS Secretary Mike Leavitt said, "When people have information on price and quality, whether it's an individual consumer or a corporate payer, they'll be a better informed consumer." He added, "Prices will go down, and quality will go up. That happens whenever a competitive market is fully informed."
However, Rick Pollack, executive vice president of the American Hospital Association, said the plan will not lower costs because, "[o]n average, Medicare pays less than the cost of delivering the service" (Connolly, Washington Post, 3/17).
The Hill on Wednesday also examined the administration proposal, which has "not been warmly received by the hospital sector" (Young/McCormack, The Hill, 3/15).
"A more transparent pricing system would help give providers and patients more control over their health care dollar," Rep. Michael Burgess (R-Texas) writes in a Washington Times opinion piece, adding, "Patients with portable health care dollars that can be paid at point of service are extremely attractive to most health care providers who normally have to wait for an insurance company" to reimburse them.
Burgess writes that a lack of price transparency "has created a system where customers don't have the ability to hold providers and payers accountable" and has led to "double-digit cost increases" annually. According to Burgess, the "opportunity to plug into a fully transparent system would transform the American health care system in a radical manner, improving care for all Americans, rich and poor" (Burgess, Washington Times, 3/16).