New Health Care Transparency Requirements: Recommendations for Optimizing Pricing Data to Reduce System Costs

Federal rules requiring hospitals and health care systems to publicly post prices fall short of maximizing savings related to health care costs.

The Issue

Many hospitals are not yet complying with the new transparency requirements set by the federal government, and the data posted has been in many cases hidden from web search engines or provided in a format that complicates analysis, according to qualitative insights compiled by Georgetown University Health Policy Institute researchers.

Key Findings

Researchers found that hospital price transparency rules could be strengthened to measure price variation, empower employers to make better purchasing decisions and enable more accurate oversight of insurers by:

• Expanding the number of hospitals publishing pricing data by increasing the maximum penalty from $300 per day to $5,500 per day.
• Requiring hospitals to present data uniformly, through a “machine readable” template that complies with Centers for Medicare and Medicaid Services’ (CMS) regulations.
• Asking hospitals to display their commercial and Medicare rates side-by-side.

Conclusion

Measures are needed to reduce health care costs because some hospitals have prevented their data from being utilized in price analysis, while insurers fail to control prices and are often incentivized to keep provider prices high. General access to more robust hospital pricing data can help policymakers better target the most significant drivers of health care costs.

About Georgetown University's Health Policy Institute–Center on Health Insurance Reforms

The Center on Health Insurance Reforms at Georgetown University's Health Policy Institute is a nonpartisan, expert team of faculty and staff dedicated to conducting research on the complex and developing relationship between state and federal oversight of the health insurance marketplace.