Committee OKs Pricing Transparency Bill

The Assembly Committee on Health yesterday unanimously passed a measure to make pricing of health care services and procedures more transparent.

AB 1558 by Assembly member Roger Hernández (D-West Covina) would task the UC system to create the California Health Data Organization, to gather pricing data from insurers and health care service plans, so consumers can get a better idea about what they’re being charged. 

It’s a nationwide effort that makes sense for California, according to

Gerald Kominski, director of the UCLA Center for Health Policy Research. Right now in health care, Kominski said, there is no explanation at all for billing — something completely foreign to other industries.

“Basically the market would be, ‘Trust us, we’ll charge you a fair price,’ ” Kominski said. “In health care, there is no transparency.”

Transparency, he said, will lead to lower costs.

“This bill would provide basic price information, to allow market forces to do what they do in other markets, and that means lower prices,” he said. “Price transparency is the missing piece.”

The many health care reforms being tried across the state are lacking one meaningful measurement, he said: cost.

“Without cost information, no one knows if higher costs produce better care,” Kominski said.

No organization opposed the measure, though concerns were raised by several groups, including the California Hospital Association.

“It’s important that this be done in a meaningful manner,” said Barbara Glaser, senior legislative advocate for the CHA. Rates between insurers and hospitals are negotiated in private, and that helps keep some pricing low, she said. “Making those rates public could have negative impact,” she said.   

“We are supporters of transparency,” said Nick Louizos, director of legislative affairs for the California Association of Health Plans. “We don’t have a formal position on the bill yet. But we don’t believe the all-payer claims database is the right way to go.”

The bill passed on a 19-0 vote and now heads to the Assembly Committee on Appropriations.

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