If patients can benefit from price transparency by hospitals, shouldn’t employers and health insurers post online what they are paying for medical services? Yes, say federal regulators, who started requiring this effective July 1.
The federal Centers for Medicare and Medicaid Services (CMS) has ordered parties that act as health payers to make public a wealth of economic information that previously had been closely held, NPR and the Kaiser Health News service reported:
“[H]ealth insurers and self-insured employers must post on websites just about every price they’ve negotiated with providers for health care services, item by item. About the only exclusion is the prices paid for prescription drugs, except those administered in hospitals or doctors’ offices. The federally required data release could affect future prices or even how employers contract for health care. Many will see for the first time how well their insurers are doing compared with others. The new rules are far broader than those that went into effect last year requiring hospitals to post their negotiated rates for the public to see. Now insurers must post the amounts paid for ‘every physician in network, every hospital, every surgery center, every nursing facility,’ said Jeffrey Leibach, a partner at the consulting firm Guidehouse.”
But these new, public datasets will be gigantic, haltingly released across the health care industry, and set up initially more for experts to review, the Wall Street Journal reported:
“The new data is coming in the form of massive, machine-readable digital files, typically in formats not easily accessible to consumers, posted mostly on insurers’ websites … some big insurers release[ed] data by the early morning hours [of July 1], including Elevance Health Inc.’s Anthem, Cigna Corp., and Humana Inc., according to Turquoise Health Co., a company compiling the data. UnitedHealth Group Inc.’s UnitedHealthcare had posted files online by mid-morning [July 1], according to a review of their disclosure website. CVS Health Corp.’s Aetna said ahead of the deadline it planned to comply with disclosures on time. In addition to insurers, employers are required to post prices under the rule, though many of them are expected to outsource the responsibility to insurers and health-plan administrators. Early review of newly posted information found some disclosures were incomplete, with files that lacked some granular pricing data, said Maximilian Pany, a graduate student and researcher affiliated with the Healthcare Markets and Regulation Lab at Harvard Medical School.”
Price transparency advocates had argued that market forces, notably wonkish entrepreneurs, would recognize the value to patients of the health payer data, processing and translating it, so that multiple parties in health care — especially consumers — could rely on the information to shop around and negotiate for best deals and bargains. To advance this prospective use of the information, CMS regulations also soon will require insurers and employers to provide handy resources to interpret and best use the pricing data, KHN reported:
“[S]starting Jan. 1, the rules require insurers to provide online tools that will help people get upfront cost estimates for about 500 so-called ‘shoppable’ services, meaning medical care they can schedule ahead of time. [Combined with private parties offering their analytical resources,] ‘you’ll at least have the options in front of you,’ said Chris Severn, CEO of Turquoise Health, an online company that has posted price information made available under the rules for hospitals, although many hospitals have yet to comply. With the addition of the insurers’ data, sites like his will be able to drill down further into cost variation from one place to another or among insurers. ‘If you’re going to get an X-ray, you will be able to see that you can do it for $250 at this hospital, $75 at the imaging center down the road, or your specialist can do it in office for $25,’ he said. Everyone will know everyone else’s business: for example, how much insurers Aetna and Humana pay the same surgery center for a knee replacement.”
The Wall Street Journal reported that the price transparency rules will give patients and researchers far more data than, say, what they have received under analogous disclosure requirements for hospitals, too many of which have snubbed transparency regulations and, for now, have succeeded in flouting cost transparency regulations affecting them. As the newspaper reported:
“The insurer data … is expected to cover much more of the health care ecosystem, wrapping in the prices for free-standing surgery centers, clinics, private doctor practices, labs, and other types of medical-service providers. The more expansive data will eventually allow consumers to make more comprehensive decisions, said Adam Geitgey, chief technology officer at Turquoise Health and one of the company’s founders.”
While pricing disclosures by hospitals, insurers, and employers may seem a positive step, it has its challenges, too, experts say. They note that hospitals have dragged their feet on posting required information and regulators only recently have prodded them to do so with fines. CMS apparently learned from this experience and insurers and employers (payers) face more deadlines and bigger fines to release their data.
Still, this all begs a fundamental issue: Will patients wade through data to shop around for medical services in ways that will drive down costs? This crucial issue has been studied and as the New York Times reported not that long ago:
“Shopping for health care may sound ludicrous on its face — and sometimes is. People don’t have time, let alone the cognitive focus, to shop for treatments while having a heart attack, or during any other emergency. But not all care we need is related to an emergency. Some care is elective, and so potentially “shoppable.” Scholars have estimated that as much as 30% or 40% of care falls into this category. It includes things like elective joint replacements and routine checkups. And yet very few people shop for this type of care, even when they’re on the hook for the bill. Maybe it’s just too complex. Even when price transparency tools are offered to consumers to make it easier, almost nobody uses them.”
In my practice, I see not only the harms that patients suffer while seeking medical services, but also their struggles to access and afford safe, efficient, and excellent health care. This has become an ordeal due to the skyrocketing complexity, uncertainty, and cost of treatments and prescription medications, too many of which turn out to be dangerous and bankrupting drugs.
When regular folks get seriously hurt or sick, they need real help, including from excellent legal counsel, to keep their lives together. We know that debilitated patients and their loved ones confront an infuriating health care system in which the financial aspects (like bills and collections) seem to move massively and with alacrity, while the treatment end proceeds with painful deliberation. In the blur of all this, policy people really expect us to dive into websites and seek bargains in our medical care?
The hard truth, which data continues to show, is that health care providers charge us whatever they can, because they can. Providers and payers (insurers and employers) may spar among themselves, but they have relied on the sad reality that sick and injured people and their loved ones will fork over a lot to be well. And the government agencies that should stand up for the public’s interest are not doing enough. Maybe they can’t because, for example, Congress — whose members take lavish campaign contributions from special interests, including health care — won’t let them use the giant sway of the federal government to negotiate prices on items like prescription drugs?
We have much work to do to ensure that health care is a right, not a privilege for the wealthy few. And that it is safe, affordable, accessible, efficient, and excellent.