WASHINGTON DC Price transparency can reduce costs and improve health care outcomes for families, workers and small businesses, witnesses testified at a Ways and Means Committee hearing on health care price transparency. Witnesses shared their first-hand experience using price transparency to benefit patients seeking care or small businesses sponsoring insurance for their employees. Unfortunately, the Biden administration has so far failed to fully enforce Trump-era price transparency rules, allowing hospitals to continue to leave cash-strapped patients in the dark about the cost of their care. To help patients, the administration should fully enforce existing price transparency rules, and Congress should look for more ways to enable patients to unleash price transparency through tools like modernized health savings accounts to access better care. quality and affordable healthcare.
Fewer than one in four hospitals comply with Trump’s price transparency rules
In 2019, under President Trump’s leadership, the Centers for Medicare & Medicaid Services finalized the hospital pricing transparency rule. Three years later, the Biden administration has failed to fully enforce the rule. Jason Smith, Chair, Ways and Means Committee (MO-08) he brought the facts, citing that fewer than one in four hospitals are estimated to comply with these price transparency rules and that only four out of 6,000 hospitals nationwide have ever been fined for non-compliance.
President Smith: By one estimate, fewer than 25 percent of hospitals are fully compliant with President Trump’s historic price transparency rules, and those are just the ones reviewed. To date, the Centers for Medicare and Medicaid Services fined just four hospitals for noncompliance. Four hospitals. There are 6,000 hospitals in the United States. Do we really think that almost all American hospitals are compliant? We don’t know because CMS doesn’t make compliance reviews and enforcement actions public. We can get more information about a local restaurant from Yelp than you can get about your local hospital from CMS.
Doctor: Price transparency literally drives patients to seek treatment at my clinic
When it comes to affordable healthcare services, patients respond to prices. Pricing transparency allows patients to choose healthcare that offers the greatest benefit at an understandable price. Dr. Ron Piniecki is the medical director of a surgical center that provides upfront, transparent pricing for medical procedures on his website, unlike most hospitals where patients don’t know the true cost until the procedure is done. been performed. Dr. Piniecki highlighted the difference that pricing transparency is currently making for patients.
President Smith: Dr. Piniecki, you run an outpatient surgery center that has transparent upfront pricing for patients. How did your patients react knowing with certainty the price they will pay for the procedure?
Dr Piniecki: That was very encouraging to me. What’s really interesting is there have been people who have actually bought treatment, they’ve actually been online. Did I mention the Nebraska patient, we had a patient travel from the Upper Peninsula of Michigan for a colonoscopy. They said, Hey, I looked around. The hospital was this price. We called the nearby city the hospitals were that price. We are willing to travel 10 hours to come here and receive a package that we knew was exactly what it would cost.
Without competition you have a monopoly
Price transparency gives patients an opportunity to compare costs, which spurs competition and ultimately helps reduce costs for families and workers, he noted. Subcommittee Chair on Health Vern Buchanan (FL-16) during an exchange with Dr. Piniecki, who explained how increased price transparency has enabled his study to reduce costs for gallbladder surgeries by 60 percent.
Representative Buchanan: I know personally, people who shop, take their time, buy a house, buy a car, all the things we’re talking about, they’re going to get a lot more than just a better deal. Ideally, this doesn’t work for everyone, but it will work for many people. Without competition you have a monopoly[Dr. Piniecki] what are you seeing just in terms of reduction with what you are doing? Take a minute to talk a little more about competition and transparency, the difference it’s making in rewards.
Dr Piniecki: When we were building care delivery pricing around CPT codes, like if you need your gallbladder removed, there’s a CPT code associated with that. We knew how much Medicare was paying for it. And we had some data on commercial insurance. And so the question was, could we really save significant amounts? You know, and honestly, I thought maybe we could save 10-15%. That number I mentioned earlier, that 50 percent savings, payment from a commercial insurer for you know a gallbladder removal in our state is somewhere around $20,000, after negotiated discounts.
Representative Buchanan: So, across the board about 50 percent [savings] or something?
Dr Piniecki: We do it for nine [thousand], so probably about 60-65 percent [savings].
Price transparency has the potential to stop spending on expensive, low-quality care
Patients have no idea whether the healthcare they receive is the best value, forcing Americans to pay outrageous prices for potentially low-quality care without even knowing better care is available. Representative Ron Estes (KS-04) and Bill Kampine, founder of a company that provides health care cost and quality data for employers, discussed how price transparency can reduce costs for patients, small businesses that provide health care, and dent the federal government’s massive health care spending.
Estes Rep.: Data shows that greater healthcare pricing transparency could help reverse the trend. If transparency translates into a 1% reduction in costs, that could have resulted in a $4.8 billion reduction in federal spending over 10 years. Mr. Kampine, if these transparency rules were improved, what would be the economic results and what can we expect to see in terms of costs for high cost services?
Mr Kampine: One of our retail clients, a patient requiring a joint replacement, received a $150,000 joint replacement. This hospital was in the bottom 20 percent of all patient outcomes in the US the top 20 percent of all hospitals and cost about $35,000. We have huge differences in price and quality for services. Being able to navigate and being able to align benefit design to reward patients for use of high-value care and discourage use of low-value care has a tremendous opportunity for savings not only for the employee himself, but also for the sponsoring employer of the plan. When we look at this data, about 40 percent of the total spending for a given employer could be purchased. Within that expense, you can easily save half of that expense. There is a significant amount of money on the table.
Bureaucracy harms families using direct primary care
Directed primary care arrangements offer families a low-cost option to receive needed primary care health services. Under current legislation, working families holding health savings accounts (HSAs) are prohibited from entering into direct primary care arrangements, depriving them of innovative primary care services. This ban particularly hurts working families as 78% of HSAs are used by taxpayers earning less than $100,000, he warned Representative Lloyd Smucker (PA-11):
Smucker Representative: And I think at least in my community, doctors like it [direct primary care], because that monthly payment structure means they can spend less time coding services and do what they really want to do as doctors, spend time caring for their patients. And so this current IRS rule that prevents 32.5 million Americans with health savings account participation from using those funds to pay for direct primary care, I think that’s something that’s a small fix that I think would benefit to many people
Mr. Short, employers who offer direct primary care are reporting savings of over 22% or 20%, in some cases, and I wonder if you could just talk a little about it to explain how it can both reduce costs and improve outcomes. healthcare for patients.
Mr Short: Absolutely, even in my company, we offer and pay for direct primary care precisely because of the savings that we have been able to discover by having the program in place for more than eight years now. Indeed, we are able to incentivize health professionals and primary care physicians to take an active role in the preventive medicine of our employees and their families.
And actively engaging them, where really their incentive is to keep people healthy, versus a paid world where they make money when people are sick, we’ve seen the actual results come in and undo the bigger claimants where diabetes is a great example if we can hold diabetes before it becomes a problem with metformin, other processes, we can save money for the plan. “
Smucker Representative: Do you see any reason why patients with HSA shouldn’t be allowed to take part in direct primary care?
Short representation: I see no reason. Sounds like common sense.
Price transparency can reduce costs for workers and small businesses
Without price transparency, patients are forced to make important healthcare decisions with little or no information about the cost of their care. Small businesses in particular can benefit from reducing a major item in their budget. Kendy Triano, HR manager for a company that offers its employees significant price transparency, shared with Representative Blake Moore (UT-01) how its employees have benefited from this practice.
Representative Moore: Have your employees been able to see a lower cost by taking an innovative step like your company has?
Mrs. Triano: Our employees have seen much lower costs. Number one, all of their prescriptions are paid for. Now they can go through online prescription companies. There are no networks. The insurance company doesn’t tell them or their doctor what they may or may not have done. They have seen lower costs.
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