Impact of Price Transparency Rules... Underwhelming
Power Poll Members have a Dim View of Effectiveness
The Trump Administration and CMS have proposed regulations that will require hospitals to publish the prices they have negotiated with payors for 300 high volume services. The new rules are designed to reduce hospital costs over time as consumers sought the lowest cost care. We were interested in knowing what impact our panel of experts saw if the regulations are finalized as proposed.
The Power Poll members were clear – 71% felt the regulations would have no consistent effect on prices in the 24 months following enactment. About 29% thought the rules might have some impact on prices but 17% thought it would push prices down and 13% thought it would increase prices.
We next asked how our national panel of health leaders thought hospitals would respond in the short term – 24 months. Better that 2 out of 3 respondents thought that hospitals would forcefully lobby against enactment. One in five (21%) thought hospital prices would move toward the market mean price and 13% felt there would be no real impact.
The forecast over the mid-term (3 to 7 years) was a bit more positive – 42% of respondents thought that the big downward effect on pricing would be driven by self-insured employers implementing index pricing in their benefit plans. These index pricing models use the average market price to reimburse costs and require covered workers to pay the difference out-of-pocket if they choose a provider whose price is above the average for the market. Another group (42%) were convinced that the most significant impact in the mid-term would be the creation of new information technologies to aid customer and employer decision-making.
Panel members were not even convinced that hospitals had the most complete information on the price for any particular consumer. Nearly 60% (57.9%) believe health insurers have the most complete information.
They also felt that the most important cost information for consumers about a particular hospital service is not the total cost of the episode (38% felt this was most important) but rather the out-of-pocket costs they would likely incur (46%). 17% felt that consumers would be most interested in other factors that might influence the cost for them including out-of-network effects, and surprise billings.
Lastly, we wondered if the panel thought that hospitals ought to report the prices they are paid by Medicare, Medicaid and other government payers. 62% said yes reasoning that those rates are significantly lower than private rates (54%) and 8% felt doing so would positively influence creation of a public option in the future. 38% felt public payer rates should not be included with 21% noting that those rates are artificially low because of cost shifting from public to private payers. 13% said no because public payer rates can be artificially high for some providers due to adjustments for Graduate Medical Education and uncompensated care.