Price Transparency: Bigger than Healthcare for Patients and Doctors

August 24, 2021

By Heidi Overton, M.D.

You rarely see a healthcare issue with 90 percent support from the public, bipartisan support in federal and state governments, and the potential to help doctors, nurses, and multi-disciplinary teams better care for patients. For too long, healthcare practitioners have not had the necessary tools to help patients address one of their primary concerns — the high cost of medical care. Hospital price transparency will help change that.

Identifying the problem
Before January 2019, my medical training and career had focused on saving lives — whether from injuries sustained in a car crash or advanced cancer — never on how to prevent the patient from experiencing financial ruin from the care provided by our team. Clearly, over 900,000 other physicians in the country and I did not go into medicine to lead our patients into bankruptcy — in fact, we take an oath to “do no harm.”

According to the Urban Institute, medical debt affects an estimated 15 percent of Americans. If a procedure had a 15 percent complication rate, it would be a top priority for the doctor and hospital to address. Some physicians have called for billing quality to be considered medical quality, but studies have shown that doctors generally do not know the cost of the procedures they perform. Avalere Health resources indicate that patients want to talk to their doctors about care costs, and doctors are willing to have these conversations if they have adequate information.

The patient perspective
As I learned during my internship, patient interactions always provide the best education. My hands-on training came from trips to courthouses and local diners in Fredericksburg, Virginia, the historic boyhood home of our Nation’s first president, and Carlsbad, New Mexico, one of my childhood hometowns, for research and advocacy work. In these small towns that represent the heart of America, I first encountered Americans who were having their wages garnished by their local hospitals for bills they could not pay. Hospitals have a right to payment for services rendered, and patients have an obligation to pay for services received, but hospitals often markup bills far above Medicare allowable costs. Insurance companies generally have negotiated charges for specific services, but uninsured and cash-pay patients are frequently billed for list or “chargemaster” prices and expected to pay these amounts in full. The combination of high, unexpected medical bills and aggressive collection practices made the individuals we met feel like they had lost all control.

Finding a solution
Fortunately, I discovered a movement to put patients and doctors back in control of healthcare. It consisted of doctors, employers, advocates, patients, economists, researchers, and policymakers. A main tenet of the movement was that patients should know the prices of non-emergent care before they receive it, just like in any other industry. And the movement received the highest endorsement in the country — the President of the United States.

On June 24, 2019, the Trump Administration issued an Executive Order titled “Improving Price and Quality Transparency in American Healthcare to Put Patients First.” I was privileged to stand with former President Trump as a physician advocate that day and recall him saying, “this is bigger than healthcare.”

Implementing price transparency
Nearly 2 years later, it is evident that price transparency is about more than healthcare policy. It is about returning control and dignity to patients and empowering doctors and patients to make better decisions for wellness together.

The Trump Administration followed through on the executive order by issuing a final rule that, effective January 1, 2021, hospitals are required to provide clear, accessible pricing information online for five standard charges, including gross charges and charges negotiated with insurers for items and services. Although the rule has been in effect for more than 7 months now, there has been variable implementation thus far by hospitals according to multiple analyses, including Health Affairs, the Texas Public Policy Foundation and Health Cost Labs, Turquoise Health, and more.

Full implementation has broad bipartisan support at the federal and state levels. President Biden’s recent executive order directed the Department of Health and Human Services to support the hospital price transparency rules. Last month, the Centers for Medicare and Medicaid Services issued a proposed rule that significantly increases non-compliance penalties for hospitals. Earlier this summer, the Texas legislature passed a bill to codify the hospital price transparency rules with its own version of stronger penalties for hospitals that do not comply.

Healthcare costs and “Continuing Medical Education” Healthcare providers and practitioners should use the new tools and resources made possible by price transparency rules as an opportunity to create a new form of continuing medical education so that discussing healthcare costs becomes part of routine medical care. In practice, this would look like primary care doctors helping counsel patients on the most cost-effective facility to get a CT scan or lab test or surgeons telling people how much an operation is expected to cost.

Price transparency is one tool to restore medicine’s core mission: to care for the entire patient and do no harm.

Heidi Overton serves as Director, Center for a Healthy America for the America First Policy Institute (AFPI).