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Price Transparency in Health Care

The push for hospital price transparency has gained more momentum with last week’s announcement from the Health Care Cost Institute that major health plans have agreed to provide consumers with free access to health care prices. That follows the proposed rule from the Centers for Medicare & Medicaid Services that would require hospitals to release a standard list of prices. Growing enrollment in health plans with higher levels of consumer cost-sharing have further fueled the issue.

However, providing meaningful price information tailored to a specific patient is challenging. It can be difficult to predict in advance, for example, if a particular surgery may be straight-forward for one patient while full of unanticipated complications for another. On top of that, hospital prices do not include physician or other professional costs or how much of the cost the patient’s health plan may cover.

A task force convened by the Healthcare Financial Management Association [HFMA]  has developed guiding principles, policy considerations, and recommendations for price transparency frameworks in a new report. Its five guiding principles:

  1. Price transparency should empower patients to make meaningful price comparisons prior to care; it would also allow other care purchasers and clinicians to identify providers that offer the level of value sought for their patients.
  2. Price transparency should be easy to use and easy to communicate to stakeholders.
  3. Price transparency information should be paired with other information that defines the value of services.
  4. Price transparency should ultimately provide patients with the information they need to understand the total price of their care and what is included in that price.
  5. Price transparency will require the commitment and active participation of all stakeholders.

HFMA has also published a consumer guide to understanding healthcare prices and has compiled some examples of price transparency tools.

Sources and other recent background information:

2014 Advocacy agenda policy papers: hospital price transparency. American Hospital Association, 2014. http://www.aha.org/content/14/ip-pricetransparency.pdf

Major US health plans agree to give consumers free access to timely information about health care prices to foster greater transparency. Press release, Health Care Cost Institute, May 14, 2014. http://www.healthcostinstitute.org/news-and-events/major-us-health-plans-agree-give-consumers-free-access-timely-information-about-heal

Viebeck E. New price transparency rules for hospitals. The Hill, Apr. 30, 2014. http://thehill.com/policy/healthcare/204868-new-price-transparency-rules-for-hospitals-under-o-care

Price transparency in health care; report from the HFMA Price Transparency Task Force. Healthcare Financial Management Associaton, 2014. http://www.hfma.org/Content.aspx?id=22305

Understanding healthcare prices: a consumer guide. Healthcare Financial Management Association, 2014. http://www.hfma.org/WorkArea/DownloadAsset.aspx?id=22288 

Examples of price transparency tools. Healthcare Financial Management Association, accessed May 20, 2014 at http://www.hfma.org/Content.aspx?id=22295

Patient financial communications best practices. Healthcare Financial Management Association, accessed May 20, 2014 at http://www.hfma.org/Content.aspx?id=20098

White C ; Ginsberg PB; Tu HT; and others. Healthcare price transparency: policy approaches and estimated impacts on spending. Policy analysis, WestHealth Policy Center, May 2014.  http://www.westhealth.org/sites/default/files/Price%20Transparency%20Policy%20Analysis%20FINAL%205-2-14.pdf

Shinkman R. Hospital leaders must acknowledge they’re losing the war over price transparency. FierceHealthFinance, May 19, 2014. http://www.fiercehealthfinance.com/story/hospital-leaders-must-acknowledge-theyre-losing-war-over-price-transparency/2014-05-19

Transparency and disclosure of health costs and provider payments: state actions. National Conference of State Legislatures, Apr. 2014. http://www.ncsl.org/research/health/transparency-and-disclosure-health-costs.aspx

Report card on state transparency laws. Catalyst for Payment Reform, Mar. 25, 2014. http://www.catalyzepaymentreform.org/images/documents/2014Report.pdf

2014 comprehensive specifications for the evaluation of price transparency tools. Catalyst for Payment Reform, Jan. 2014. http://www.catalyzepaymentreform.org/images/documents/2014CPRSpecifications.pdf

Administration offers consumers an unprecedented look at hospital charges. Press release, U.S. Dept. of Health & Human Services, May 8, 2013. http://www.hhs.gov/news/press/2013pres/05/20130508a.html

NEW as of June 2, 2014:

Millman J. Further evidence of how weird hospital pricing is. Washington Post Wonk Blog, June 2, 2014. http://www.washingtonpost.com/blogs/wonkblog/wp/2014/06/02/further-evidence-of-how-weird-hospital-pricing-is/

Keating D. Why ‘transparency’ isn’t enough for healthcare prices. Washington Post Wong Blog, June 2, 2014. http://www.washingtonpost.com/blogs/wonkblog/wp/2014/06/02/why-transparency-isnt-enough-for-health-care-prices/

Creswell J and others.Hospital charges surge for common ailments, data shows. New York Times, June 2, 2014. http://www.nytimes.com/2014/06/03/business/Medicare-Hospital-Billing-Data-Is-Released.html

Medicare provider utilization and payment data: outpatient. Centers for Medicare & Medicaid Services, accessed June 2, 2014 at http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Medicare-Provider-Charge-Data/Outpatient.html

Medicare provider utilization and payment data: inpatient. Centers for Medicare & Medicaid Services, accessed June 2, 2014 at https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Medicare-Provider-Charge-Data/Inpatient.html

Posted by AHA Resource Center (312) 422-2050, rc@aha.org

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