Price Transparency

Aaron Crane: It’s time to Ignite the Spark for meaningful price transparency 

April 26, 2023 6:40 pm

“U.S. healthcare gets a C- for price transparency” could easily be the next headline the industry sees. After all, just 70% of hospitals are in compliance with both aspects of the federal price transparency rule, a Health Affairs study found, even though the rule took effect two years ago.

But dig deeper than this study of 600 hospital websites, and you’ll find that in the eyes of the consumer, 70% could be a generous rating. That’s because there’s a difference between technical compliance and what matters most to consumers: Getting the information they need to make decisions around care. At a time when consumers are feeling the pinch of inflation, adopting a consumer mindset to price transparency is vital to protecting access to care and building trust. 

Going beyond the numbers 

On its surface, the Health Affairs study appears to take a positive view of progress toward price transparency compliance. After all, 70% compliance with both portions of the price transparency rule — posting standard charges for 300 shoppable services, with plain language descriptions and the discounted cash price, as well as a machine-readable file with rate information — is much higher than the 27% compliance rate uncovered by the Centers for Medicare & Medicaid Services (CMS) right after the rule went into effect. And 82% of hospitals comply with at least one portion of the rule. That’s good news, right? 

But what does all this mean to the consumer? It’s a fair question, given that a December 2022 survey of 1,000 consumers indicates three out of four consumers are reevaluating purchasing decisions — including healthcare purchases — due to the impact of inflation. Among these consumers, 43% say a medical bill of $249 is the most they could manage with confidence. 

When the news that two Georgia hospitals had been fined more than $1 million for failing to make standard charges hit the national media, one major news outlet pointed to a June 2022 JAMA study — based on data collected from July 1, 2021, through Sept. 30, 2021 — that found much lower rates of compliance. “That’s not fair,” one might say. “Those data are old.” That’s certainly true. However, the counterargument might be, “What took other hospitals so long to comply?” In this sense, price transparency is a matter of reputation. 

All of this got me thinking about what price transparency compliance looks like from the eyes of the consumer. I decided to visit the websites of six hospitals and health systems that have received an ‘A’ credit rating or better from one of the Big Three rating agencies. Here’s what I encountered. 

Finding the information isn’t easy. Just one of the six organizations features a prominent “price estimator” link on its home page. Two others had home page links, but they were difficult to find. One was published in fine print at the bottom of the page. 

It took patience and solid detective skills — including Google searches — to find price transparency information for the other three organizations. When I did click on the links, one of the organizations’ websites took me to a page that read, “Under Construction.” I don’t think this is acceptable to CMS. 

“Plain language” is often muddled. When it comes to use of plain language, I looked at descriptions for three common procedures — diagnostic colonoscopy, major joint replacement and normal vaginal delivery — among the five hospitals that posted this information. For normal vaginal delivery alone, there were five descriptions used: routine obstetrical care; vaginal delivery; full routine obstetrical care, vaginal delivery; routine vaginal delivery; and OB vaginal delivery without sterilization. (Yikes! Who said anything about sterilization?) 

There’s no standard for procedure groupings. When it comes to categories of shoppable services, each hospital or health system organizes its services differently. Just as confusing, the procedures contained within categories are not the same from one hospital to the next. That made finding a procedure as common as colonoscopy challenging. There should not be tremendous variation from one health system to the next in categorizing high-volume, highly common procedures included in shoppable services,  but that’s what consumers are faced with today. 

Determining the price is confusing. There was 200% variation in the high-to-low quotes around charges. And here’s where it gets extra confusing: One hospital included physician fees, three others did not, and a fifth provided estimates with and without physician fees. 

Need information on financial assistance? You’re on your own. In posting information regarding the discounted cash price — with discounts ranging from 0% to 51% — none of the hospitals suggested additional financial assistance may be available based on eligibility. Yet providing this information would be as simple as posting a link to the criteria. 

Hospitals’ approach to price transparency is disclaimer heavy. And while disclaimers are necessary, most of the disclaimers I read increased confusion — even for a seasoned healthcare finance professional like me — or generated more questions than answers. 

We can do better — and we must if we are to build and maintain trust with the communities we serve. 

Building momentum for better transparency 

There is much we can do to go beyond price transparency compliance toward meaningful transparency that allows consumers to make decisions about where and even when to seek care. When is critical. Numerous surveys point to the number of consumers who delay care due to financial concerns, with a November 2022 survey showing about one out of three consumers having done so. Nearly half of consumers (47%) expect to delay care this year due to cost concerns. 

Now is the time to reevaluate your organization’s approach to price transparency from a consumer lens. 

Start by making the information accessible and easily visible from your home page. Then, take a look at how the information is presented. Consider whether the people you run into at the supermarket could find the price for a colonoscopy. Ask yourself, too, whether they could understand it. If the answer is “no,” think about what it would take to provide greater clarity for the consumer. Make sure information regarding financial assistance is just as easy to find, such as by providing links to this information within the price transparency section of your site. 

By doubling down on meaningful price transparency, we can go beyond compliance toward providing a true resource that meets healthcare organizations’ missions and ensures consumers get the care they need, when they need it.  


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