On Monday, the House of Representatives passed the bipartisan Lower Costs, More Transparency Act, aimed at reining in the healthcare cost burden on patients, employers, unions, and workers. The legislation codifies and strengthens a hospital price transparency rule that took effect in January 2021, requiring hospitals to publish both their cash prices and negotiated prices with insurance plans. This move is a crucial step toward disclosing actual prices necessary to protect Americans from rampant hospital overpricing and empower them to find affordable care.
Do we have to go to each hospital’s website to search and compare prices? The answer is no. PatientRightsAdvocate.org released a free hospital pricing dashboard called the Hospital Price Files Finder on Monday, which aggregates price disclosures from the nation's 6,000 hospitals. It standardizes hospital price files in spreadsheet format, making pricing information accessible and enabling users to find the best care at the best prices and audit their healthcare bills to rectify well-documented billing fraud and errors.
The dashboard empowers employers, who cover nearly 160 million Americans, to compare hospital prices and make informed benefit design decisions, thereby reversing runaway health plan costs funded by workers' wages. The average annual employer-sponsored family healthcare premium has already reached $24,000 this year, representing a nearly 50% increase over the last decade.
By analyzing hospital prices, employers and unions can choose affordable care for their workers and return ensuing savings to them in the form of higher wages and lower premiums, stimulating the broader economy and helping workers overcome the rising cost of living.
For example, wild price variation can exceed ten times for the same services within the same hospitals across different commercial health plans. Nobody would tolerate paying $500 for a $50 tank of gas. Similarly, nobody should tolerate paying $3,000 for an MRI that the person in the next bed received for $300.
When actual prices are hidden, hospitals and insurance companies can get away with highway robbery without consumers knowing they are getting hosed. Approximately 100 million Americans have incurred hospital-related medical debt, with many facing home liens, asset seizures, and wage garnishments from hospital lawsuits over unpaid bills.
Price transparency enables patients to avoid such price gouging and analyze the validity of their debts—to ensure the debts are not a result of inflated bills that don't match underlying prices. By empowering consumers, price transparency ushers in competition that puts downward pressure on costs—just as prices do in every other sector of the economy.
The Hospital Price Files Finder also makes it easier and faster for government agencies to measure and enforce price transparency. According to research by PatientRightsAdvocate.org, 36% of hospitals reviewed nationwide are fully complying with the price transparency regulation. But the Department of Health and Human Services has only issued fines on 14 hospitals nationwide for violating the rule. Every day hospitals refuse to post their actual prices is another day patients remain vulnerable to overcharges, medical debt, and bankruptcy.
Comparing hospital prices still takes work. But these are the early days of the great reveal of hospital prices. Technology innovators will continuously improve this dashboard and other future competing platforms into consumer-friendly web applications that allow patients to shop for care in the same way they shop for hotels or flights.
Both legislative and grassroots efforts to strengthen hospital price transparency and boost compliance are making real prices a reality for American patients, employers, unions, and workers. Together, we can and must contain spending and restore accountability and integrity in the U.S. healthcare system.
Cynthia A. Fisher is the Founder and Chairman of PatientRightsAdvocate.org. Ge Bai is a professor of accounting at Johns Hopkins Carey Business School and of health policy and management at Johns Hopkins Bloomberg School of Public Health.
