The House Ways and Means Subcommittee on Health heard testimony on July 18 on the importance of increasing price transparency in health care, its impact on slowing spending growth, and current efforts to provide the true cost of medical services.
Ha T. Tu, senior researcher at the Center for Studying Health System Change, offered several lessons on price sensitivity learned from studying consumers who pay out of pocket for LASIK surgery, in vitro fertilization, and cosmetic rhinoplasty. Few of these consumers price shop for these procedures, preferring to rely on other patients’ recommendations or referrals from their physicians as a proxy for quality. And although Tu emphasized the importance of price and quality transparency for medical procedures, he added, “We need to be realistic about the magnitude of the potential for improvement if consumers become more effective shoppers for health care.”
Hospitals are doing their part to make prices available to consumers, testified Stephen Brenton, president of the Wisconsin Hospital Association. The WHA has “the most comprehensive private-sector price transparency initiative in the nation,” said Brenton, and it is working with seven other states to develop similar programs. The PricePoint web site contains hospital-specific information on inpatient prices for all DRGs, aggregate reduced prices taken by public and private payers, totals of charity and uncompensated care, and a link to quality and patient safety information. But the burden of price transparency should not fall on hospitals alone. “We believe that health plans currently involved in marketing HSAs and high-deductible products must offer up information to their consumers as an essential, value-added service,” said Brenton. “Similarly, a focus totally on hospitals fails to generate necessary information from physician offices, freestanding diagnostic centers, and pharmacies.”
The committee also heard from Robin Downey, product development head for Aetna, who said that up to 1,000 consumers each month in one pilot-test city have logged on to Aetna’s web site to get information on actual discounted rates for physician visits, diagnostic tests, and minor procedures. This August, Aetna will provide price and quality data for nearly 15,000 specialists and pricing for up to 30 procedures for each of 70,000 physicians. In the future, Aetna says it will add pricing information for hospitals and ancillary providers. Read the testimony.
