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New Paragon Study — Health Care Price Transparency: Achievements, Challenges, and Next Steps

President at Paragon Health Institute
Brian Blase, Ph.D., is the President of Paragon Health Institute. Brian was Special Assistant to the President for Economic Policy at the White House’s National Economic Council (NEC) from 2017-2019, where he coordinated the development and execution of numerous health policies and advised the President, NEC director, and senior officials. After leaving the White House, Brian founded Blase Policy Strategies and serves as its CEO.

Today, Paragon released a new study from Private Health Reform Initiative Director and Senior Research Fellow Theo MerkelHealth Care Price Transparency: Achievements, Challenges, and Next Steps.

As a special assistant to the President at the National Economic Council in 2019 and 2020, Theo was instrumental in the development and implementation of rules requiring hospitals and health plans to make price information publicly available. Three committees in the House of Representatives marked up transparency legislation this summer, and the full House will likely pass price transparency legislation later this year. Theo has closely monitored the development of the rules and congressional proposals that would codify and build on the rules. In his new study, he provides an important update as well as several recommendations for Congress.

Theo’s full study is available here. Below is the executive summary:

Pricing information, and with it the ability to compare relative prices of alternatives, is an extremely important part of how both consumers and suppliers discern value for most items and services in the United States. Yet decades of laws and regulations eroded the incentive for prices to be disclosed in health care—even for routine, non-emergent, and shoppable care.

The Trump administration dramatically changed that status quo with two major regulations that force health care providers and payers to disclose actual prices to the individual patient and comprehensive pricing data to the general public. Congress followed suit by requiring providers and payers to provide personalized pricing information to patients in advance of care.

Reversing decades of opaque pricing has not happened overnight, but there have been positive developments along the way to full implementation of the three major federal price transparency provisions. This report provides a brief overview of recent federal action, suggests reasons for optimism despite slow and uneven compliance, and makes six recommendations to policymakers for improvement:

1- Codify the rules.

2- Improve compliance through enforcement.

3- Expand the scope of the hospital price transparency rule to other facilities.

4- Establish a process for updating the standards for the machine-readable files.

5- Reduce the size of the Transparency in Coverage machine-readable files.

6- Avoid sharp turns.

As I wrote in a 2019 report for the Galen Institute, price transparency will have four main positive effects: 1) Better informed consumers and patients, 2) Better informed employers that help workers shop for value, 3) Improved ability for employers to monitor insurer effectiveness and eliminate counterproductive middlemen, and 4) Public pressure on high-cost providers. Ultimately, improved shopping for health care will put pressure on health insurers and health care providers to deliver better value for consumers and patients. 

All the best,
Brian Blase
Paragon Health Institute

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