Written by Cynthia A. Fisher

In our highly politicized environment, the parties of the left and right agree on very little. However, on one issue, they do agree. Healthcare price transparency is a policy the Trump Administration heartily championed and made into a rule, and one that the Biden Administration strongly supports. Moreover, according to multiple surveys, 90 percent of Americans also want to know health care prices.

On January 1, the Health Care Price Transparency Final Rule took effect, and Americans won that right.

The problem is it didn’t happen. Hospitals, which tried to kill the rule twice in court and failed, have universally, and with few exceptions, not complied with the federal rule. A recent study that reviewed 500 random hospitals in 50 states found that 94.6 percent of hospitals were not complying. Other studies have had similar findings. This summer, the Biden Administration added teeth to the price transparency rule. The Department of Health and Human Services announced plans to increase monetary penalties on noncompliant hospitals from a pathetically low annual maximum of $109,500 to a more meaningful $2 million.

While that’s a good start, we need to do more if we are going to usher in the consumer revolution that can fix the American healthcare system.

At PatientRightsAdvocate.org, we are working to advance policies that will bring systemwide transparency to healthcare and that will allow patients easy, free, real-time access to upfront prices. Empowered with such information, consumers — both patients and employers — will be able to shop for the best quality of care at the lowest possible price. While getting this rule passed was a huge victory for Americans, we must now fight to get hospitals and, ultimately, insurance companies to obey the law. The current system of hidden prices for healthcare services leads to overcharging, price-gouging, fraud, and the inability of consumers and employers to shop for and receive high-quality, affordable care.

The price transparency rule requires hospitals to publish their real prices, including their discounted cash prices and secret contracted rates by payer and plan. Easy access to actual prices would put consumers in the driver’s seat of their healthcare decisions, giving them financial certainty and assurance that a trip to the hospital won’t result in financial ruin.

Hospitals are required to post these prices in two formats: a machine-readable format and a consumer-friendly version. The machine-readable format will allow third-party tech innovators to aggregate this information in easy-to-use web applications.

When they do, consumers will be able to shop and compare healthcare prices on their laptops or mobile devices the way they shop for everything else, from plane tickets to home appliances. This price transparency can transform the opaque and inflationary U.S. healthcare system into a functional, competitive marketplace that has the potential to dramatically lower runaway Healthcare costs.

While HHS’s higher monetary penalty will help, we need even more significant penalties and enforcement to ensure all hospitals comply. PRA and Consumers First, an interest group coalition representing labor unions, consumers, and employers, recommends increasing the noncompliance penalty to $300 per bed per day. Recent polling by Harvard pollster John Della Volpe suggests more than three-quarters of Americans support such heavier fines on hospitals that hide their prices.

If, in its forthcoming revised rule, HHS reinforces the law with stricter penalties, cuts off avenues to work around the rule, and enacts robust enforcement, we can begin to see the benefits of hospital compliance and ultimately turn the vision of healthcare price transparency into reality. Meanwhile, Americans must exercise their right to know real, upfront, all-in prices and demand them as a condition to receiving care. That is our mission, and we hope you will join us in this fight.

Here are more ways we can strengthen the rule and hold hospitals accountable:

HHS needs to enforce the aspect of the law that requires hospitals to provide price information without barriers. Price-estimator tools usually require patients to provide personal information, including names, addresses, and insurance information. Thus, what should be an anonymous search for competitive prices turns into a way for hospitals to grab patient data, in exchange for providing only one price estimate, which is meaningless and non-binding. Price estimators’ biggest flaw is that they don’t protect patients from wild deviations from the projected price. The Wall Street Journal recently reported that prices can vary by ten times within the same hospital, depending on the payer, and sometimes price fluctuations are even larger.

HHS should require hospital executives to attest that their full prices are available, transparent, and easy to access, and to send a link to their online database to HHS, where the agency should confirm full compliance. Fortune 500 CEOs must make similar disclosures routinely.

The rule needs to further hold hospitals accountable by requiring them to not only provide real prices, not estimates, but also to eliminate the common disclaimers on their websites saying that the hospital’s estimates offer no guarantee that the final bill will match.

HHS should engage in a robust consumer education campaign to increase public awareness of the rule and let consumers know they now have the right to know real prices before they receive care.

HHS needs to modify the rule and ban the option of letting hospitals use a “price-estimator tool.” Allowing hospitals to provide price estimates lets them continue to game the system, obfuscate
real prices, and skirt the rule’s intention.

Because they offer one insurance-based price, estimates rarely provide discounted cash prices, which are typically 39 percent less than insurers’ negotiated rates, according to research published by Vanderbilt University health economist Dr. Larry Van Horn.

— Here’s what else Americans need to achieve real healthcare price transparency

Written by Cynthia A. Fisher Photo provided by Mitigate Partners Cynthia A. Fisher is a life science entrepreneur, founder and former CEO of ViaCord Inc., and founder and chair of PatientRightsAdvocate.org, a 501(c)(3) nonprofit, non-partisan organization that provides a voice for healthcare consumers to have transparency in healthcare. PRA embraces free market principles, which will foster a competitive, functional marketplace and restore trust and accountability to the nation’s healthcare system.