States Failing When It Comes to Health Care Price Transparency Laws

March 19, 2013

Wonder why you can't get a straight answer on how much a health care procedure will cost you? One big reason: State laws that allow hospitals and other providers to keep costs hidden until they send you the bill, says Kaiser Health News.

  • A report card on price transparency gives 29 states an "F" and seven states a "D" for policies that keep patients and their families in the dark on prices.
  • The failing grade went to those with practically no transparency requirements.
  • Only two states, Massachusetts and New Hampshire, rate an "A," and even they could improve their laws, according to the report by the Catalyst for Payment Reform.

The high prices that American health care providers charge, often with little connection to actual costs, have been in the national spotlight recently. Most consumers are unaware of the tremendous variation in price. For instance, prices for knee replacement surgery in the same California market can range from $15,000 to more than $100,000, depending on the hospital, with no discernible difference in quality.

High deductible insurance plans are becoming more common, with employers hoping consumers with "skin in the game" will shop around to help keep prices down. But, the authors note, consumers cannot make informed decisions without being able to comparison shop on the basis of either price or quality.

The grades reflect the quality and scope of the pricing data that states require and how well they disseminate it -- public websites gain high points, for example. The grades also discriminate between "charges," the prices that hospitals say they charge for services, and what a consumer and her insurance company actually pay for them. There is often little connection between the two. States that require disclosure of actual prices earned higher grades.

Sources: Russ Mitchell, "29 States Get 'F' For Price Transparency Laws," Kaiser Health News, March 18, 2013. "Report Card on State Price Transparency Laws," Catalyst for Payment Reform, March 18, 2013.

 

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