New report gives Congress guidance on health care price transparency legislation

A package of bipartisan health policies is currently moving through the U.S. House of Representatives to strengthen federal price transparency requirements on providers and health plans. The Lower Costs, More Transparency Act could move to the House floor as early as next week and, upon successful passage, will need to be taken up in the Senate. In addition to price transparency provisions, the bill includes several other bipartisan policies to support patients, health care workers, community health centers, and hospitals.  

Today American Experiment released a new report which focuses on the bill’s hospital and health plan price transparency provisions. These provisions would largely put two Trump-era rules in federal statute: the hospital price transparency rule and the health plan price transparency rule known as Transparency in Coverage.

I happen to have a particular interest and expertise in the bill’s price transparency provisions because they would largely put federal rules in statute which I helped develop and draft while I worked at the Centers for Medicaid & Medicare Services in the Trump Administration.

These rules are the product of over two years of thoughtful deliberation across three federal agencies.  As Congress now engages in its own deliberations, the preamble discussions from these two rules published to justify and explain the new requirements offer the first and best place to look for guidance. The report highlights the principles and objectives which guided this rulemaking which Congress should consider in their work to codify and strengthen these rules.

Participating in the price transparency rulemaking so far represents the pinnacle of my career. When my career ends, this work may remain the pinnacle—at least in terms of impact. That’s because these rules may prove to be the historic pivot point marking the time when America finally began addressing the structural problems driving up the cost of health care and holding back quality innovations.

Withholding prices from patients has long kept patients from having the information they need—information they readily have for every other important product and service they buy—to hold providers and health plans accountable for the high and rising cost of care. As the report explains,

American innovators lead the world in developing new lifesaving and life-enhancing medical treatments and cures. However, few people would call America’s health care system efficient or consumer friendly. When it comes to the delivery of health care, innovation in the health care sector fails to keep pace with nearly every other comparable sector of the economy. Why? As the health plan rule explains: “Without transparency in pricing, market forces cannot drive competition.” Without strong competition, the incentives to innovate and improve are far weaker in the health care sector versus other industries. Price transparency unleashes key information consumers need to pressure health plans and providers to innovate better, more efficient ways to deliver coverage and care.

Importantly, more information on pricing will lead to more information on quality as better consumer tools emerge and providers feel stronger pressure to show their quality justifies their costs.

Price transparency will certainly not be a complete solution to fix the problems with America’s health care system. But transparent pricing is a necessary element. The Lower Costs, More Transparency Act recognizes this necessity and takes the important next step to cement price transparency rules in federal statute to ensure patients can know, understand, and consider prices before they receive care.