Lawmakers and healthcare experts drew attention to continued problems with price transparency and unchecked consolidation in a hearing focused on the high cost of healthcare in the United States.
“Transparency is vital in moving to a functional market and lowering healthcare prices–put simply, we must have the data,” said Marilyn J. Bartlett, an accountant with the National Academy for State Health Policy who worked on the Montana State Employee Health Plan.
“Despite a decade of transparency laws on the books, employers, unions, states, and other purchasers continue to face challenges with substantial non-compliance,” she added.
Bartlett was one of five bipartisan witnesses who spoke at the March 28 hearing of the House Energy and Commerce Committee’s Subcommittee on Health.
Both lawmakers and experts drew attention to two key price transparency rules under the Trump administration.
One lets patients see standard charges from hospitals. The second, known as the “Transparency in Coverage” rule, makes insurers disclose a range of pricing data to their customers.
Legislators observed that compliance and enforcement have lagged somewhat.
“The hospitals, I would say, have been slow to comply,” said the subcommittee’s ranking member, Rep. Anna Eshoo (D-Calif.)
Energy and Commerce Chair Cathy McMorris Rodgers (R-Wash.) poured a little cold water on enthusiasm for that federal agency.
“Unfortunately, independent evaluators broadly agree that most hospitals have not complied fully with the rules,” she said.
She pointed out that CMS had issued just two penalties against hospitals so far.
“We need stronger enforcement at CMS,” Rodgers said.
The chair of the subcommittee, Rep. Brett Guthrie (R-Ky.), also urged the Biden administration to step up enforcement.
“It is also crucial for Congress to codify and strengthen these important transparency rules,” he said.
Energy and Commerce Ranking Member Frank Pallone (D-N.J.) said he was “troubled” to hear of hospitals “burying the information deep in their websites” or making patients provide personally identifiable information to access it.
“All this is inexcusable,” he said.
Consolidation Concerns
Those at the hearing also highlighted the anticompetitive effects of consolidation in the healthcare industry. That could translate to pricier healthcare for consumers.“We’ve seen a rise in vertical integration, where purchases occur across different sectors within the healthcare system. For example, this could mean hospitals acquiring physician groups or insurers buying PBMS [pharmaceutical benefit managers],” Rodgers said.
“For patients, this could mean their insurance company may own their doctor’s practice, their pharmacy, and the PBM that decides what they pay for medicine,” she added.
Benedic Ippolito of the American Enterprise Institute said that we now understand commercial healthcare much better than we did even as recently as a decade ago, thanks to higher quality data.
“At this point, there is very ample evidence that much of our spending reflects market frictions and inefficiencies rather than consumer preference,” Ippolito said.
“Improving competition within healthcare markets increases pressures on firms to improve quality and decrease costs. Increasing transparency in conjunction can help market actors make the best use of the choices that are made available to them and push markets to invest in the things they value by providing clear signals,” he testified.
Consolidation, she argued, was driving the high prices that make everything from common medical procedures to prescription drugs much costlier than they are in comparable developed countries.
“Americans in many communities have watched as their local hospitals became health systems, and those health systems were bought by large health care corporations,” she testified.
