- The issue of price transparency came up in exchanges Tuesday between several senators and Xavier Becerra, who has been nominated for the position of secretary of Health and Human Services.
- Becerra pledged that tough enforcement of transparency initiatives would be prioritized.
- Two senators questioned whether transparency can have a significant impact on prices, with one saying pro-competition policies will be vital.
The nomination hearing of Xavier Becerra, the prospective secretary of Health and Human Services (HHS) in the Biden administration, included several exchanges about policy approaches to tackling healthcare prices.
Becerra appeared before the Senate Health, Education, Labor & Pensions Committee on Tuesday, Feb. 23 and was scheduled to speak in front of the Finance Committee a day later. His responses Tuesday suggested that HHS under his watch won’t be looking to back away from the transparency initiatives implemented by the Trump administration.
At one point during Tuesday’s hearing, Sen. Mike Braun (R-Ind.) asked Becerra, the attorney general of California since 2017 and formerly a 24-year member of the U.S. House of Representatives, whether he “would be there to push healthcare transparency, to fix the system, before you throw more government at it.”
In asking the question, Braun noted that Becerra’s nomination has been supported by major healthcare industry groups such as the American Hospital Association, the American Medical Association and America’s Health Insurance Plans, implying those stakeholders may not favor strong transparency requirements.
“The American people are entitled to know what they’re buying, especially if it’s a life-or-death situation,” Becerra replied. “We will do robust enforcement to make sure that price transparency is there for all Americans because for far too long, people have never had an idea of what they’re going to pay if they walk into a hospital.”
How much of an impact can transparency have?
Sen. Chris Murphy (D-Conn.) alluded to a case involving a large health system in Northern California while Becerra was attorney general. Becerra’s office, along with other parties, alleged that anticompetitive practices led to higher costs for patients. The resulting settlement included a $575 million penalty and the health system’s pledge to make operational changes that would promote competition.
“I think transparency is a piece of this,” Murphy said, referring to efforts to promote fair prices. “But some of this is also just anticompetitive practices among providers and insurers. What can the federal government do here to try to have a functional marketplace in which prices are going down rather than being set?”
In response, Becerra referred back to transparency as being pivotal.
“If consumers knew what they were paying, they would really push to make sure prices go down,” he said. “That’s why our effort was supported up and down the state of California when we went after the largest healthcare provider in Northern California — because people just had an instinctive feeling that the prices they were paying were way too high.
“So what we have to do is be able to go behind the curtain. You have to be able to see how they’re operating, how they’re cutting some of these deals. You all can help in Congress to give us the tools to enforce.”
Murphy replied, “I think transparency is a great place to start. I think there are limits to the gains you can get with respect to transparency alone because the most expensive interventions people have with the healthcare system are often at the moment when they are least able to shop around.”
Can transparency address structural issues with the healthcare payment system?
Sen. Mitt Romney (R-Utah) referred to the price transparency system that was implemented in Massachusetts when he was governor of that state, saying consumers can get information both on the cost of procedures at various hospitals and on outcomes.
“But interestingly, the consumer has very little interest in that data — because for them the price is zero,” Romney said. “In our system, individuals do not have an incentive to shop around for bypass surgery, for instance, even if they have time to prepare for it.
“Once you go past your deductible — and many people have gone through their deductible during the year — it’s paid for 100% by their insurer or the federal government. So, they don’t care whether it costs $10,000 or $100,000 to have bypass surgery.”
Addressing Becerra, Romney added, “I’d suggest that it’s important in your role to look at how we create a true marketplace, which means that the consumer has interest in what something costs and therefore is anxious to shop around, particularly for elective surgeries and other high-cost treatments.”
Placing a greater emphasis on health savings accounts could be a step in the right direction, Romney said, as would the type of coinsurance system that some countries use to foster a marketplace approach.