Long an issue for uninsured patients, the lack of price information has become a significant issue for insured patients as well. Among those covered by employer-sponsored insurance, employee-cost sharing has been growing quickly. Over the 10-year period from 2004 to 2014, the average premium for family coverage increased by 69 percent, according to the Kaiser Family Foundation/Health Research & Educational Trust 2014 Employer Health Benefits Survey.

Newly insured patients gaining coverage through the state and federal marketplaces mandated by the Affordable Care Act are taking on high deductibles with the most popular bronze and silver plan options.

As patients face increased exposure to healthcare costs, they have an urgent need for meaningful and transparent price information. Patients are being asked to act as consumers in a marketplace in which price—a fundamental driver of consumer behavior—is often unknown until after the service they purchase has been performed.

As patients' financial responsibility for healthcare costs has grown, so too has media and government scrutiny of the healthcare marketplace. When the spotlight turns to prices, providers are often unable to respond to requests for price information or can provide only estimates within a wide price range. For example, the U.S. Government Accountability Office sought price information on selected procedures from 39 providers (19 hospitals and 20 primary care physician offices) as part of a 2011 report on healthcare price transparency. Of those providers that were willing to provide a price estimate for a full knee replacement surgery, the estimate ranged from about $33,000 to about $101,000.

Accurate price information may not be widely available, but charge information is. Providers thus find themselves defending or trying to explain why charge information often bears little relationship to the price that most patients are actually asked to pay.

The U.S. healthcare marketplace is complex. Prices vary by payer; government programs such as Medicare and Medicaid set payment rates, which may be below the cost of providing care. Providers typically have contractually negotiated rates with numerous health plans. But when patients seek price information and it is not available, the lack of transparency becomes the subject of public criticism and possible legislative action.

The lack of price transparency in health care threatens to erode public trust in our healthcare system, but this erosion can be stopped. The time for price transparency in health care is now. Achieving a more transparent system is a multi-stakeholder issue and requires consensus among hospitals, physicians, and other care providers; the pharmaceutical and medical device industries; commercial and governmental payers; employers; patients and consumer advocates; and regulatory agencies to develop a workable, meaningful solution.

Now that a task force representing most of these stakeholders has came together to achieve consensus and develop recommendations for improving price transparency, it is incumbent upon all industry stakeholders to act on these recommendations in a concerted effort to provide the price information that will give patients the ability to make informed care decisions and, in the process, continue to earn public trust.

Publication Date: Tuesday, March 10, 2015