What Does Hospital Price Transparency Mean for You?

“If I’m an employer, I’m going to look at three hospitals in my area and say, ‘I’ll pay the lowest price. If you want to go to one of the other two, you can pay the difference, ”Anderson said.

Will price transparency reduce overall health spending?

Disclosure of actual negotiated prices, as required by this rule, may cause the more expensive hospitals in an area to reduce prices in future negotiations with insurers or employers, which could reduce health care spending in those areas. regions.

It could go the other way as well, with lower-cost hospitals demanding an increase, which would increase spending.

Conclusion: Price transparency can help, but the market power of different players can be more important.

In some places, where there may be a dominant hospital, even employers “who know they are getting ripped off” may not think they can cut a large, branded establishment from their networks, regardless of the cost. Anderson said.

Is the rule change over?

The hospital industry has gone to court, arguing that parts of the rule go too far, violating their First Amendment rights and unfairly forcing hospitals to disclose trade secrets. This information, the industry said, can then be used against them in negotiations with insurers and employers.

But the District of Columbia U.S. District Court disagreed with the hospitals and upheld the rule, prompting the industry to appeal. On December 29, the U.S. Court of Appeals for the District of Columbia upheld this lower court ruling and did not block the rule.

In a written statement last week, the general counsel for the American Hospital Association spoke of the “disappointment” of the decision and said the organization “is carefully reviewing the decision to determine next steps.”

In addition to the litigation, the American Hospital Association plans to speak with the incoming Biden administration “to try to persuade them that certain elements of this rule and the insurer rule are delicate,” said Tom Nickels, executive vice president of commerce. group. “We want to help consumers, but is it really in people’s best interests to offer privately negotiated rates?”

Fisher thinks so, “Hospitals are fighting this because they want to keep their negotiated agreements with insurers a secret,” she said. “These rules give the American consumer the power to be informed.”

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Jothi Venkat

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