Healthcare News & Insights

HHS calls for more price transparency from hospitals

Price transparency is about to become even more critical for hospitals – that is, if a proposal from the Department of Health and Human Services (HHS) becomes final. 

In a recent proposed rule about healthcare technology, HHS asked stakeholders two questions about whether hospitals should start making the negotiated prices they charge payors for medical procedures public.

The change is designed to encourage competition “based on the quality and value of the services patients receive” and cut costs across the board, according to an NPR article about the rule.

If the decision to publish negotiated prices moves forward, HHS would announce the decision in a second proposed rule specifically for that purposes.

Pros and cons of price transparency

This push toward price transparency aligns with an earlier decision to have hospitals publish their base prices for services and treatment on their websites.

HHS has also been introducing several new proposals designed to increase price transparency and decrease healthcare costs, including a measure that would require drug companies to list the price of their medications when advertising on TV and another change where Medicare would pay the same price for certain drugs to treat arthritis and cancer that other countries do.

While publicly posting the chargemaster list has been a mixed bag for both hospitals and patients, publishing negotiated insurance prices could put these numbers into context and provide more insight into the true cost of hospital treatment and services.

But some healthcare experts and industry groups think it’s a bad idea.

The American Medical Association (AHA) opposes the movement to publish insurer pricing. Representatives claim that consumers don’t really need to see the prices hospitals charge payors – they just need to be able to pay their bills once they arrive. The most important info for them is their exact out-of-pocket costs for services, not what their insurance is paying the hospital.

Health economist Zack Cooper, quoted in the NPR article, said most people don’t perform searches for pricing info on their own, looking to shop around for the best deal on health care. So posting negotiated prices may not have a big impact on health costs.

However, many of the public comments on HHS’ proposed rule indicate otherwise. Commenters specifically called out the healthcare industry for refusing to make it easy for patients to shop around for the most cost-effective care.

Regardless of what facilities think about making the prices they pay and charge for treatment more transparent, the trend likely isn’t going away.

Since patients now have a great deal of financial responsibility for their health care (and often struggle with paying their bills), they’re more price conscious than ever. That means they’ll be demanding more price info from hospitals – and you may have to provide it to stay competitive.

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  1. D. Klouser says:

    I AGREE 100%. After seeing a Dr. whose office happened to be in the hospital I received a bill 9 months later for $170 that stated clinic visit. When I called to question what this was as I already paid $300 to see the Dr. they said it was a “Facility” charge — basically because the Dr. had his office in the hospital I had to pay $170 to the hospital for that office space. ABSOLUTELY OUTRAGEOUS.

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