Efforts in Congress to make health care pricing more transparent for consumers need your support. Action Alert!
Lawmakers in the Senate are in the midst of creating legislation intended to make health care pricing more transparent. It is imperative that they hear from consumers—and not just industry cronies—about the importance of transparency.
It’s no mystery that American health care is a crony capitalist mess. In many ways, this is because we treat health care differently than almost every other service. When we visit a mechanic, we are told in advance what we can expect to pay. This is not the case in health care. Rather, we go to the hospital or to a doctor when we’re sick and, too often, are presented with bills full of complex codes that help conceal outrageous costs: $10 for an aspirin; $300 for a single X-ray; $8,000 for an emergency room visit.
Part of the reason consumers are so powerless in these situations is because there is very little transparency in health care pricing. We don’t know the price of a service until we see it on the hospital bill. For this reason, we recently supported legislation in the House of Representatives that would require hospitals, physicians, pharmacies, dentists, health insurers, and other entities offering healthcare services to disclose the price for their products and services at the point of purchase and list prices online. This reform would help drive down costs, since healthcare providers that gouge consumers would lose out to those charging a fair price. It’s the basic economic principle of competition.
A similar effort is taking shape in the Senate. A bipartisan group of senators including Bill Cassidy (R-LA), Michael Bennet (D-CO), Chuck Grassley (R-IA), Tom Carper (D-DE), and Claire McCaskill (D-MO) are spearheading an effort to increase price transparency in health care.
There is no bill as of yet; the senators are in the midst of soliciting feedback from a wide variety of professional associations on how best to achieve the goal of greater transparency. We hope the senators receive honest answers, but we won’t hold our breath. In our view, groups like the American Hospital Association and the American Medical Association profit from consumer confusion.
An additional bill from Sen. Grassley seeks to introduce transparency into the 340B drug pricing program. The program requires drug makers to provide drugs at discounted prices to qualifying hospitals and other entities. As the law currently stands, however, there is no requirement for participating hospitals to report how much patients are charged for discounted drugs. Sen. Grassley’s bill requires hospitals to report to HHS the total acquisition costs for drugs collected through the 340B program, as well as revenues received from all third-party payers for those same drugs.
While it’s a good idea to see if hospitals are profiting at the expense of 340B, we think such reports should be made public and not just to HHS, which might continue to hide the information from consumers.
Transparency in health care pricing also seems to have the backing of the Trump administration. In a speech describing the administration’s proposal for value-based health care, Health and Human Services Secretary Alex Azar highlighted the importance of price transparency as a missing feature of the US health system. One part of Azar’s speech seems to hint at an executive order: “So this administration is calling on not just doctors and hospitals, but also drug companies and pharmacies, to become more transparent about pricing and outcomes of their services and products. And if that doesn’t happen, we have plenty of levers to pull that would help drive this change.”
It’s time we apply some common sense to health care policies in this country, starting with basic economic principles.
Action Alert! Write to Congress and urge them to support transparency in health care pricing—including a message on Sen. Grassley’s bill that 340B reporting should be made public, not just to HHS. Please send your message immediately.
