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Hospital price lists were supposed to improve transparency—they haven’t

October 7, 2021, 9:00 PM UTC

In recent years, lawmakers have been pushing for medical price transparency to ensure consumers can make the best decisions when it comes to their health care. But it turns out that the rules already in place are not as effective as anticipated and the solutions to the problem are anything but simple.

The hospital price transparency rule has been in effect now for nine months, but during Fortune’s latest Brainstorm Health Discussion experts said the new requirements have not proven very effective. 

Enacted under the Trump administration, starting Jan. 1, 2021, the Centers for Medicare & Medicaid Services required U.S. hospitals to provide “clear, accessible pricing information online” in either a comprehensive machine-readable file or a list of shoppable services displayed in a consumer-friendly format. The aim was to make it easier for consumers to estimate and compare the cost of procedures and health services across hospitals.

But so far, the rule hasn’t been very helpful in demystifying the cost of medical services. About 61% of hospitals had posted the required information, according to a June report from Milliman. But the data quality varies widely and about a third of hospitals have uploaded insufficient information, while 6% have none of the required costs or analysis.  

“While most hospitals have posted something, it’s most likely bill charge information, and not to the level of detail that’s really meaningful for people to know what they would pay, specifically given their insurer’s rates with the hospital,” said Bobbi Coluni, leader of payer product management with IBM Watson Health. 

Yet while the data required under the new rule hasn’t delivered meaningful transparency, it has raised awareness of the issue, said Martin Gaynor, a professor of economics and public policy at Carnegie Mellon University. 

Part of the issue in getting this information out to the public is the sheer amount of data at issue, said Molly Smith, group vice president of public policy with the American Hospital Association. “These files are enormous,” Smith said, reaching petabytes (or millions of gigabytes) of data. 

Another worry is that by sharing this information, it will reduce competition and could lead to pricing collusion between hospitals. But Gaynor threw cold water on this theory on Thursday. “I’m not particularly concerned about collusion in this industry,” he said. 

Gaynor also said that while the file sizes of this data are not trivial, that should also not be an excuse for hospitals not to comply. “Let’s get into the 21st century,” he said, adding that the medical industry is one that has lagged way behind the times. 

But at the end of the day, while the rule’s goals are laudable, it’s likely not going to eliminate surprise medical bills for consumers or dramatically improve affordability. “It’s worthwhile, Gaynor said, but added “I don’t think this is going to transform healthcare.” 

Smith agreed: “I do not think that this is the data that is ultimately going to help address this overarching issue of affordability in the healthcare system.” 

Addressing costs will likely take a multi-pronged approach, said Matt Eyles, president & CEO of America’s Health Insurance Plans. He pointed to legislation and regulation in progress, such as the No Surprise Act, which the Biden Administration pushed forward, that seeks to curb “surprise billing” for medical care. 

But experts involved in Thursday’s discussion all agreed that improving consumers’ understanding of medical billing and cost estimates is critical. “This is an important problem to solve. The question is, is the way that we’re trying to solve it now through this legislation going to yield the results? I think there are other, other ways we could be doing this,” Coluni said. 

“Guess what? Healthcare is complicated. But that’s not a reason not to do stuff,” added Gaynor. “The challenge, I think we all agree, is just figuring out how to do things. There is a path forward with this, it’s just structuring it in an appropriate way so it really benefits everybody.”

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