New Congress must pass health care price transparency

The divisive midterm elections are finally over, and with the resulting divided Congress, only legislation supported by both parties has a chance of becoming law. The new Congress can come together and achieve an early bipartisan victory by addressing one of the most pressing issues facing all Americans: the health care cost crisis.

According to a recent Gallup poll, nearly 40% of Americans are willing to change their vote to the candidate with the best solutions to the nation’s health care problem. In other words, many people are willing to put effective health care policy above political party preference.

The health care fix that receives the broadest bipartisan support is health care price transparency, which is supported by a supermajority of nearly 90% of Americans. By codifying and bolstering a federal hospital price transparency rule into law, Congress can empower Americans to substantially reduce their health care costs through choice and competition.

Addressing runaway health care costs is urgently needed. Recently, the Labor Department revealed that the cost of health insurance rose by 20.6% over the previous year, nearly three times the overall inflation rate. Last month, the Kaiser Family Foundation announced that the average annual employer-sponsored family health care premium reached $22,463 in 2022, nearly one-third of the nation’s median household income.

Experts predict costs will spiral even faster next year. Numerous health plans, including the one covering New Jersey public workers, have enacted rate increases of more than 20% for 2023.

As a result of skyrocketing health care costs, 100 million Americans hold medical debt, and nearly two-thirds avoid care each year for fear of financial ruin. Rapidly increasing employer health insurance costs attack American businesses and cannibalize funds that can otherwise go to pay raises to help workers contend with historic inflation.

To not act in the face of this calamity is evidence of a form of health care Stockholm syndrome.

Merely increasing the number of Americans with health insurance means little if consumers can’t afford premiums or care. In contrast, price transparency can actually bend the cost curve.

Actual, upfront prices allow health care consumers, including employers and unions, to spot the well-documented, wild price fluctuations for the same care, even at the same hospital. For example, at one California hospital, the price of a cesarean section ranges from $6,200 to $60,600. A recent study published in the journal Radiology finds CT scans can range from $134 to $4,065 at the same hospital.

Armed with real prices, consumers can avoid rampant hospital price gouging in favor of quality, less-expensive alternatives for the more than 90% of non-emergency health care spending. When prices are known upfront, no consumer will tolerate paying 10 times more than the person in the bed next to them for the same care.

Employers and unions can use ensuing savings to reduce premiums and boost wages. Consider the union SEIU 32BJ, which represents approximately 200,000 building-services workers across the Northeast. It recently gave its members their largest pay increases in history and $3,000 bonuses after analyzing its claims data and excising the price-gouging hospital New York-Presbyterian from its plan.

On Jan. 1, 2021, a federal hospital price transparency rule took effect requiring hospitals to publish their discounted cash prices and all health insurance rates. This information can make it easier for health care consumers to follow the lead of SEIU 32BJ and other innovative employers.

Unfortunately, the rule has been marred by widespread hospital noncompliance. A recent study by PatientRightsAdvocate.org finds that only 16% of hospitals are fully complying with it.

Congress can boost compliance and improve the rule by codifying it into law. It can make the rule more effective for consumers by requiring hospitals to follow clear data disclosure standards to allow third-party tech innovators to aggregate prices in easy-to-use web applications the way travel websites aggregate airfares on sites like Kayak or Expedia.

Legislators can further improve the rule by eliminating a loophole that permits hospitals to post estimates instead of real prices. Cost estimates are faux transparency. Only actual prices empower consumers to compare and substantially save with peace of mind that the final bill will match the quoted price.

The new Congress can score an early victory by reversing runaway health care costs through robust price transparency, a solution supported by an overwhelming bipartisan supermajority. The divided Congress should make this health care fix its top priority.

Cynthia A. Fisher is founder and chair of PatientRightsAdvocate.org, and the founder and former CEO of ViaCord Inc. She wrote this column for The Dallas Morning News.

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