More Price Transparency Needed in Healthcare, House Members Say

— But Democrats argue it won't be enough to fix the healthcare system

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A screenshot of Jason Smith speaking during this hearing.

WASHINGTON -- How much difference would more price transparency make in healthcare? House members heard -- and gave -- a variety of opinions on the topic at a Ways & Means Committee hearing Tuesday.

"Price transparency works," said Committee Chair Jason Smith (R-Mo.). "In the past 20 years, the prices of medical services increased by 130%. Meanwhile, other shoppable commodities -- like TVs, for example -- decreased by nearly 100% ... We have seen prices of shoppable healthcare services, like Lasik eye surgery, decrease by 15% over the last 15 years, while innovation and quality increased. Instead of keeping patients in the waiting room for real reform, we should pursue further price transparency tools to lower costs."

He criticized the Biden administration for not doing more to implement the price transparency provisions of the No Surprises Act, noting that only four hospitals have been fined for failure to make public their pricing, even though less than 25% of hospitals are said to be compliant with the law. "There are 6,000 hospitals in the United States," he said. "Do we really think that nearly every American hospital is in compliance? ... Cash-strapped patients need to be able to compare prices and decide where to get care."

'May Help Around the Margins'

Rep. Richard Neal (D-Mass.), the committee's ranking member, agreed that more price transparency would be helpful but added, "We should not pretend, however, that transparency and shopping alone is the magic of the marketplace ... Improvements and transparency may help around the margins, but we know likely we'll have to go much farther in making sure that consumers actually have access to affordable dependable and comprehensive coverage that won't leave them high and dry at a time of need."

Witnesses offered a variety of perspectives on the topic. Kendy Troiano, human resources director at the Clark Grave Vault Company in Columbus, Ohio, said that after the 114-employee company was faced with a 35% premium increase by its insurer, United Healthcare, company officials decided to switch to Sidecar Health, a fixed-indemnity health plan that offered coverage at only a 10% increase. (Fixed indemnity plans pay a set amount for each service, with patients paying the remainder; because they are not considered full health insurance plans, they don't have to comply with essential benefits rules and other federal insurance requirements.)

"The plan allows us the freedom to choose any licensed provider who accepts cash or a credit card, because we are not constrained by networks, formularies, or prior authorizations," Troiano explained. "We are provided a budget or benefit amount for any medical need, and that allows us to choose a provider based on that budget. It is our choice to stay within the budget or pay out a little bit more ... When we find care for less, we keep the savings through a credit. For the first time, we have to kind of price transparency needed to shop for care."

"In addition to the savings we see as a company, our employees also see savings at the provider's office and the pharmacy," she added. "For example, my husband's oncology visit last year was billed to my insurance company for $233; through self-pay, I paid $100 for the same visit. His lab work went from $80 per visit to $30 per visit for cash pay."

Saving Money With Bundled Payments

Ron Piniecki, MD, an anesthesiologist in Indianapolis, Indiana, and medical director of Wellbridge Surgical, an ambulatory surgery center, described his company's transition to a bundled payment approach. "We thought maybe initially, we'd be able to save 10% or 15% over the current cost of care," he said. "When we finished the analysis, we realized that actually we could save between 50% and 70% from the current payouts after negotiated discounts by the insurers. And so that really kind of opened up the door to providing care across multiple demographics."

"We started with four surgical specialties, and now we're up to 30 credentialed and privileged surgeons across 10 surgical specialties," Piniecki continued. The fee quoted on the company's website for a particular procedure includes the surgeon's fee, the anesthesiologist's fee, the pathology fee, implants if needed, and routine follow-up care.

Rick Gilfillan, MD, former director of the Center for Medicare and Medicaid Innovation under President Obama and former Trinity Health CEO, was skeptical. "I don't believe today's operative assumption that if we give patients pricing information, they will respond as logical economic actors in a well-functioning marketplace, thereby lowering costs and improving outcomes," he said. "It seems quite ironic and inappropriate to me that given America's broken healthcare marketplace, that most businesses operate outside of usual marketplace constraints. We want patients to provide market discipline by shopping. Meanwhile, insurers with near monopolies take 17% of the cost of care for operations and profits."

He offered seven principles for reform: Ensure a comprehensive health insurance to cover everyone in America; eliminate overpayments in government programs like Medicare Advantage; create an all-payer system with standard pricing for all populations; create a public option built on a network of strengthened primary care and accountable providers; maintain current levels of employee contributions; use savings resulting from reducing other spending to address social determinants of health; and continue publicizing cost and quality data across America.

Disagreements Over Health Savings Accounts

Some witnesses, as well as committee Republicans, praised the use of health savings accounts (HSAs) -- tax-advantaged accounts that employees can use to pay medical expenses. "Our customers highly value HSAs, as they provide individuals with tax advantage means to save for medical expenses and encourage individuals become proactive health care consumers," said William Short, executive chairman of Ameriflex, a company that administers HSAs. "However, effectiveness of HSAs can be hindered by an opaque healthcare system."

But Rep. Lloyd Doggett (D-Texas) disagreed. "There are data showing that the majority of U.S, households have less than $3,000 in their checking and savings accounts, but the average deductible for an HSA is about $2,500. So for many who have an HSA, an emergency can still wipe out families' savings ... Having an account doesn't mean you have much -- or any -- money in it."

But there were some areas of agreement. Rep. Earl Blumenauer (D-Ore.) discussed the Primary Care Enhancement Act, a bill to promote the use of direct primary care (DPC) practices, which charge patients a set monthly amount that pays for physician visits and other primary care services. The bill, which Blumenauer co-sponsored with fellow committee member Rep. Lloyd Smucker (R-Pa.), would allow patients with HSAs to use up to $150 a month in HSA money to pay for a DPC arrangement.

"I hope that this is an area that our committee can be involved in," he said. "[Promote] direct primary care and get rid of fee-for-service for more people."

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    Joyce Frieden oversees MedPage Today’s Washington coverage, including stories about Congress, the White House, the Supreme Court, healthcare trade associations, and federal agencies. She has 35 years of experience covering health policy. Follow