May 11, 2010

Both Democratic and Republican legislators and the American Hospital Association are advocating for transparency in healthcare pricing as three bills were debated in the May 6 Committee on Energy and Commerce health subcommittee hearing.

It is clear there is bipartisan desire to pass legislation requiring healthcare providers to disclose pricing information for services. But whether there will be action on the bills this year is unclear.

Backers of the bills contend healthcare prices would be lower if there were stricter pricing disclosures required. But Frank Pollone, (D-N.J.), Chairman of the health subcommittee of the Committee on Energy and Commerce, said that more price transparency is just one part of a larger plan for healthcare and that one possible disadvantage is that in small markets vendors might just match their competitors’ prices, reported Jennifer Haberkorn of Politico.

Currently 34 states mandate hospitals to report information on hospital charges and seven more states make that voluntary, states the American Hospital Association. In California hospitals have to make a cost estimate to uninsured patients and cannot charge more than the hospital would be reimbursed by a government payer.

But a 2009 study by researchers of two medical schools, the California HealthCare Foundation and RAND Health, stated,  “Current California legislation fails to meet its objective of enabling uninsured patients to compare prices for hospital-based health care services.” The study was published on Nov. 21, 2009 in the Journal of General Internal Medicine. Letters were sent to 353 California hospitals from fictitious uninsured patients asking for cost estimates of common medical procedures. Only 28 percent of the hospitals responded and of those not all of them provided a price quote.

Support for price transparency appears to be growing among legislators with three bills having been introduced:

The broadest bill is HR 4700, introduced on Feb. 25, 2010 by Representative Steve Kagen (D-Wis). It requires that prices for services by hospitals, physicians, nurses, pharmacies, pharmaceutical manufacturers, dentists and insurance agencies be made transparent. 

Two Republicans also have bills. HR 4803 was introduced on March 10, 2010 by Representative Joe Barton (R-Texas) It covers transparency in health benefits plans, hospital and ambulatory surgical center prices and information on the quality of care at each hospital.

HR 2249 is co-sponsored by Michael Burgess (R-Texas) and Gene Green (R-Texas) who introduced it on May 5, 2009. It would require hospitals to make public their charges and health insurers to estimate out-of-pocket costs and guarantee that those out-of-pocket costs will not exceed the estimate.

The American Hospital Association has endorsed HR 2249, the Burgess/Green bill which would expand reporting requirements in all 50 states, the AHA stated in a press release. But it adds that while sharing prices with consumers is important, it will be a challenge to provide meaningful information. One patient’s gall bladder operation may be much more complicated than another’s.

The Patient Protection and Affordable Care Act, signed into law by President Barack Obama on Mar. 23, 2010, requires hospitals to report annually and post a public list of hospital charges, And the Department of Health and Human Services is responsible for creating guidelines for public reporting this year.

“But more can-and should-be done to share health care information with the public, including but not limited to, hospital pricing information,” The AHA stated in its May 6 testimony before the U.S. House of Representatives Committee on Energy and Commerce Subcommittee on Health.

Four years ago the AHA approved its own policy regarding hospital pricing transparency. It calls for making pricing easy to access and understand, creating common definitions and language, explaining why prices vary, encouraging patients to look at other factors in addition to price when making healthcare decisions and alerting patients to information about financial assistance.