Pricing Transparency Gaining Interest

Insuring Resources Commentary:
With some bipartisan support on these pending bills it'd be great to see something happen on transparency. See the article below.

Also, Rep. Steve Kagen (Appleton) is the author of one of the bills. Appleton happens to be the home of ThedaCare - a leader in lean strategies and health care transparency. (www.createhealthcarevalue.org)

As Rep. Barton states below, the PPACA does fall short of the implementing the transparency we need going forward. This is a great companion bill in that regard to get the amount of transparency America needs to truly provide physicians and hospitals the cost incentives we need.


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Pricing transparency gaining renewed interest
By Matthew DoBias of Modern Physician Magazine
Posted: May 24, 2010

Led by a physician lawmaker, members of Congress on both sides of the aisle have shown renewed interest in mandating a boost in healthcare pricing transparency, including charges for physician services.

But one key player, the chairman of the Energy and Commerce Committee's Health Subcommittee, Rep. Frank Pallone (D-N.J.), is skeptical that three bills that came before that committee this month will make it into law this year given Congress' calendar is backlogged as a result of the lengthy healthcare reform fight.

One bill, introduced by physician Rep. Steve Kagen, M.D., (D-Wis.), would require doctors, hospitals, nurses, pharmacies and a number of manufacturers and vendors to openly disclose prices. Failure to do so would result in a financial penalty. Kagen says the current system is “upside down,” adding that it allows for those with no insurance to be charged the full amount while it gives the insured steep discounts.

“Some will argue that showing everyone all of the prices is too complex, for there are tens of thousands of prices at any given hospitals,” Kagen says. “But today's technology allows all of us to go online on the Internet and search for items to purchase and find exactly what we want to buy within milliseconds.”

Another bill, sponsored by Rep. Joe Barton (R-Texas) but backed by several Democrats, requires public and private health plans to make known what services they cover, any restrictions in that coverage and the cost-sharing requirements that are also involved. Two years out, it would require hospitals and ambulatory surgical centers to publicly disclose the charges for services they typically perform. A third bill requires a higher level of Medicaid transparency.

Taken together, the bills attempt to give individuals the important information they need to choose where to go for care and how much they can expect to pay once they get there.

Barton acknowledges that the new reform law contains provisions that would inch toward a more transparent system, but he says they fall short.
Under the law, hospitals during the next six months are required to disclose annually a list of their standard charges for items and services, including Medicare DRGs.

Critics contend, however, that “standard” charges are too vague. Steven Summer, president and CEO of the Colorado Hospital Association, says the healthcare system in its current form makes it difficult to post accurate and meaningful pricing information.

“We firmly believe that everyone needs to have access to consumer-friendly pricing language,” Summer told the congressional subcommittee.

Colorado hospitals annually publish some financial data, which compares charges vs. the average length of stay for common medical treatments and surgical procedures.

While many lawmakers agree that price transparency is needed, political realities could squelch any momentum the bills may have. Democratic leaders in the House have deliberately planned a lighter workload heading into the November elections.

“Members have been asking to have hearings and move on legislation for a long time, so I'm more concerned at this point about having hearings and moving legislation that has been held up,” Pallone says. “And that's what I'm getting from members.”