AHA: Price transparency needed, but efforts uneven

Price transparency initiatives are taking hold slowly in the U.S., and are now active in 35 states and a variety of hospitals, according to an American Hospital Association (AHA) white paper.

The AHA felt the need to more closely examine price transparency initiatives given the trend of cost-shifting onto individual patients, while acknowledging that consumers could benefit from more financial data. However, the AHA conceded that "these public and private resources provide varying levels of detail on price and quality information. They also have varying levels of utility in supporting consumer decision-making." And, the white paper also concluded that having a standardized price list for all procedures is all but impossible, given the unpredictability of delivering medical care.

Moreover, the white paper also found that since patients are inured to the high cost of most healthcare deliveries, quality data should accompany prices. "Research shows that when consumers are presented with quality data alongside prices, more than 90 percent of consumers will choose providers with low-cost and high-quality scores," it states.

But few consumers actually receive any relevant price transparency data--90 percent of states fail in their price transparency efforts. And few patients even receive cost estimates prior to undergoing medical procedures, a recent study by TransUnion concluded.

The Centers for Medicare & Medicaid Services' release since June 2013 of what hospitals charge for the 100 most common inpatient and 30 most common outpatient procedures is among the biggest efforts toward price transparency, according to the white paper. Among non-federal efforts, 35 states have some sort of price reporting initiatives in place, but seven of those states rely on voluntary reporting. Eleven states are in the process of creating all-payer claims databases, which some experts believe could save more than $100 billion over the next decade if implemented nationwide.

Such databases "when presented in a consumer-friendly manner...can supply accurate estimates for common health services and enable consumers to compare costs across providers before making a treatment decision," the AHA noted, although the organization concluded few states have attempted to make such data consumer-friendly. There are also large gaps in price transparency efforts by geography, particularly in the South and Midwest.

Nevertheless, the AHA concluded that "the push for greater transparency likely is here to stay. Hospitals and other providers recognize the need to work with federal and state governments, insurers, employers and commercial vendors to increase the availability and usefulness of price information for consumers."

To learn more:
- read the white paper (.pdf)