Healthcare Price Transparency Challenges and Opportunities

Price transparency in healthcare has become more important as consumers increasingly engage in healthcare decision making and are asked to pay more for their care. A new issue brief from America’s Health Insurance Plans (AHIP) takes a look at price transparency efforts, barriers to improved price transparency, and structuring future initiatives.

Making healthcare cost information readily available and usable by consumers is one way health plans and employers are hoping to improve efficiency, clinical effectiveness, and value.

“As a result of the increased recognition of the value of price transparency in informing consumer decision-making and promoting efficient, quality care, health plans, as well as the federal and state governments, have taken steps to increase the availability of price information for health care services and promote its use in consumer decision-making,” according to the AHIP issue brief.

There are really 2 main challenges to implementing price transparency in healthcare, according to the report. One challenge to greater price transparency is that the definition of cost may change depending on who is incurring the cost: the patient, the provider, the insurer, or the employer. The second challenge is simply availability of price information and public interest in using the data provided.

The use of price transparency tools has many benefits. For instance, price transparency for a procedure can reduce that procedure’s market price.

“Price transparency can also reduce claims payments for lab tests, advanced imaging, and clinician office visits, and reduce overall payments made for clinical care,” according to the issue brief.

AHIP also provided key elements that should be used to evolve initiatives and tools to make provider price information available:

1. Price information that is comparable, actionable, and consumer-friendly In order for the information to be useful, it must be based on common definitions and must highlight meaningful differences in price.
2. Price information that is paired with quality information Consumers who only receive price information believe higher cost means higher quality, but presenting cost and quality information side by side and highlighting high-value options improves the likelihood that consumers will choose them.
3. Price information that benefits consumers without anticompetitive impact Price transparency initiatives should disclose data that will be useful when consumers select healthcare services and providers, such as out-of-pocket costs for specific services; cost-sharing obligations under the plan; and relative cost of receiving care at different providers.

“As price transparency initiatives and tools continue to evolve, stakeholders should pursue continued emphasis on the integration of quality information, given existing evidence that cost data, presented with quality data, can influence consumer decision-making and lead to value-based choices,” the brief concludes.