Advocates say price transparency alone won’t fix healthcare prices

By Tom Joyce
The Center Square

Letting patients see hospital prices can help, but it will not fix the high cost of health care by itself. That’s what witnesses told members of the House Energy and Commerce Subcommittee on Health at a hearing on health care price transparency.

The recent hearing came as the Trump administration pushes hospitals to follow federal price transparency rules. The administration recently warned more than 500 hospitals that they must post clearer price information or risk fines.

The rules require hospitals to post prices online so patients, employers and insurers can see what care may cost before a bill comes.

However, several witnesses told lawmakers that price transparency alone will not bring down costs.

“Transparency is necessary, but it is not sufficient,” Shawn Gremminger, president and CEO of the National Alliance of Healthcare Purchaser Coalitions, told lawmakers.

Gremminger said Congress should also look at site-neutral payments, facility fees, and contract terms that make it harder for patients and employers to find cheaper care.

Christopher Whaley, an associate professor at Brown University’s School of Public Health, said large hospital systems have gained more power through mergers.

“Over the last two decades, roughly 2,000 hospital mergers have produced massive health system conglomerates, increasing prices with no quality improvement,” Whaley said.

He also claimed some cancer patients at hospitals in the federal 340B drug program can face drug markups near 700%.

Sophia Tripoli, senior director of health policy at Families USA, said hospital consolidation has cost Americans money.

“Over the last 25 years, unchecked hospital consolidation has driven up prices by over 220%, costing hardworking Americans nearly a trillion dollars in lost wages since 2012,” Tripoli said.

The hearing also brought attention to nonprofit hospitals. Critics say some large nonprofit hospital systems receive tax benefits while charging high prices, paying executives large salaries, and using their size to dominate local markets.

Consumer Action for a Strong Economy Chairman Gerard Scimeca said lawmakers should not stop with price transparency.

“When five experts from different sides of the country start singing the same song in Washington, it’s clear that something needs to be done to save our healthcare system,” Scimeca said. “They’re right – transparency isn’t enough and that’s why we’ve been working to bring legislation demanding reform to the state level. I hope Congress sees the need to pop open the hood on these ‘nonprofits’ and finds a way to bring true relief to taxpayers at the federal level.”

The Center Square previously reported that some taxpayer advocates also support the Trump administration’s push to get more claims data in federal employee health plans.

Trent England, executive director of Save Our States, told The Center Square in April that hospitals and other providers benefit when patients and taxpayers cannot easily see prices.

“Hospitals and other medical providers set their prices, and they benefit from the opacity,” England said. “They benefit from the fact that it’s just hard to see.”

Andrew Bremberg, who served as director of the Domestic Policy Council during Trump’s first term, told The Center Square that claims data can help the government find fraud.

“It’s vital that OPM get this claims data so they can detect fraud and fight back against it,” Bremberg said.

Trump also created the federal Task Force to Eliminate Fraud earlier this year. The White House said the task force will target waste, fraud and abuse in federal programs, including health care.

Hospitals have raised concerns about some price transparency rules. The American Hospital Association says the rules can create more paperwork and may not always help patients know what they will pay.

Still, witnesses told lawmakers that patients need better price information. They also said Congress must look at the power large hospital systems have over prices.