NH price transparency pressures hospitals

New Hampshire is one of the few states that compels insurers to report and make public the rates they pay to providers--which sometimes leads to lower hospital prices, Kaiser Health News reported.

That was the case with Exeter Hospital, which made $10 million in cost concessions during a 2010 contract dispute with Anthem Blue Cross Blue Shield, according to the article. That came three years after the Granite State launched its HealthCost website, which shows the median prices insurers pay for 40 different procedures. Those include mammograms, outpatient knee procedures and emergency room visits.

Industry observers noted that the price transparency in New Hampshire compelled the hospital to "step back" and evaluate its behavior.

"It's an important component, but it's not a silver bullet," Mark Whitney, a vice president at Exeter Health Resources, told KHN. "Premiums didn't drop, the overall cost of healthcare didn't necessarily drop."

Moreover, even when such price data is widely available to patients, they tend not to make their choices of provider based on price unless their employer or insurer creates financial incentives in order to do so.

"What we found is transparency in the absence of some incentive to shop doesn't get very far," Maribeth Shannon of the California Healthcare Foundation told KHN.

A more effective approach is to actively enforce reference pricing, wherein the insurer places a hard cap on what it will pay for a procedure. That helped the California Public Employee Retirement System, or CalPERS save $5.5 million on orthopedic surgeries.

Earlier this year, the Obama administration gave the okay for insurers to use reference pricing for certain procedures. This followed on the heels of an Employee Benefit Research Institute study that suggests that reference pricing could cut the cost of a hip or knee replacement by more than $10,000 on average.

To learn more:
- read the Kaiser Health News article