New analysis reveals price transparency could save $100B

Several healthcare finance transparency measures could save the sector as much as $100 billion over the next decade, according to a new analysis.

Providers have multiple options to expand consumer access to cost information, according to the analysis, performed by the Center for Studying Health System Change and published by the Gary and Mary West Health Policy Center. For example, they can create an all-claims database where consumers can obtain specific hospital price information for procedures from all commercial and government payers. This alone could save $61 billion over a decade, the analysis suggested.

Prices for procedures could also be stored in electronic health record systems and displayed to doctors when ordering tests--which could generate savings of up to $25 billion over the next decade, according to the analysis. Similarly, requiring all payers to provide expense estimates to patients could save $20 billion in a decade.

"While healthcare transparency is typically viewed through the lens of patient-facing transparency tools to drive comparison shopping, our analysis suggests even greater impact could be achieved by expanding the audience for such information," said Joseph Smith, chairman of the West Health Policy Center Board of Directors, in a statement. "We've found that providing price information to three key stakeholders--physicians, employers and policymakers--may have a far greater impact."

For the moment, price transparency is touch-and-go in the United States. Most states continue to receive failing grades for price transparency efforts. And aside from a surgery center in Oklahoma City, few providers provide full price cost estimates for medical procedures. The surgery center's work has pressured area providers to lower--but not reveal--their prices.

In addition to releasing the report, the West Foundation also said it would work with researchers at the University of New Hampshire to formulate a process to build all-claims databases to reveal hospital prices.

To learn more:
- read the analysis (.pdf)
- read the West Health Center statement

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