“The New Hospital Price Disclosure Rule Is Important, But Only A First Step,” Health Affairs, James C. Capretta, August 26, 2019
The new proposed regulation on hospital price transparency is an important step toward consumer-friendly price information. The regulation introduces into federal price transparency, requirements such as the concepts: of service standardization, consumer-friendly organization and terminology, and bundling of which all of are crucial for a marketplace to become price competitive.
As the administration acknowledges, this regulation by itself will not fully address the opacity of today’s market. Additional disruptive changes will be necessary to give consumers usable pricing information. Among which, meaningful transparency requires stricter standardization of the services being priced and “all in” pricing matching how consumers think about the services they need.
Additionally, the reform of the nation’s insurance payment system must be integrated into the price transparency effort to ensure consumers are price sensitive across a wider range of services. Suppliers of services will only compete on price when significant numbers of consumers have strong incentives to seek out low-cost alternatives.
Me: To which I would add there is a big difference between price and cost and it is not being acknowledged.
The Trump administration on Friday put forth two long-anticipated rules that increase price transparency for both hospitals and insurers.
The CMS’ hospital price transparency requirements finalize changes that require health systems to make their standard fees available on-demand and online. The “transparency in coverage” proposed rule would require health plans, including employer-based plans, and group and individual plans, to inform participants, beneficiaries and enrollees about price and cost-sharing information ahead of time.
The agency hopes increased price transparency will boost competition among hospitals and insurers to drive down healthcare spending.
Under the new price transparency rule, hospitals must publish their standard charges online in a machine-readable format. They will need to create at least 300 “shoppable” services, including 70 selected by the CMS.
Under the rule, hospitals would have to disclose the rates they negotiate with third-party payers, which some experts say could be illegal.
“Hospitals get ready to fight CMS in Court over Transparency,” FierceHealthcare, Robert King, November 15, 2019
More after the leap!