By: TAHP | Friday, October 25, 2024

What’s New: A new study by Turquoise Health reveals that price transparency regulations, introduced in 2021, are starting to slow the growth of health care prices, particularly in outpatient services. However, inconsistencies in implementation and data gaps mean that significant progress is still needed to fully lower costs.

Go back: The 2021 Hospital Price Transparency Final Rule requires hospitals to post their negotiated rates with insurers for common procedures. While compliance was initially slow, state and federal pressure has lead to hospitals finally meeting the new transparency requirement, allowing market forces to react to the publicly posted prices.

Why It Matters: Health insurance premiums have risen by over 5% for the third consecutive year, driven largely by providers raising the prices for health care services. Price transparency rules are starting to show results, but more aggressive measures are needed to address rising costs.

The Numbers Don’t Lie:

• Transparency data shows the highest hospital prices have decreased by 6.3% annually since 2021
• Meanwhile, hospitals earning the lowest rates are getting an average 3.4% increase.
• This market price convergence for outpatient services is happening in 87% of markets, a positive sign of transparency’s impact.

Go Deeper: Price transparency is intended to lower costs through competition and consumer choice. Early signs of success are evident, but implementation gaps and inconsistent data mean that many patients still face unpredictable bills.

Texas’s Role in Leading Change:

• Hospital & Insurer Transparency: Texas laws require hospitals and insurers to disclose negotiated rates.
• All-Payer Claims Database (APCD): Texas established the APCD for comprehensive health pricing data.
• Itemized Billing: Texas helps patients by requiring itemized billing from hospitals before debt collection.

More work to be done: While federal lawmakers debate further proposals, Texas should keep pushing for more transparency and honest billing in the next legislative session.

• Ensure price transparency compliance: Texas must ensure hospitals provide consistent and accurate pricing.
• Fully fund the APCD: Make transparency data accessible statewide.
• Expand transparency: Include shoppable services beyond hospitals, like imaging centers, labs, and outpatient surgery centers.
• Pair price with quality transparency: Share nationally recognized quality data to empower value-driven patient choices.
• Require transparent billing: Prevent excessive and often hidden facility fees when hospitals buy up clinics and add hospital fees for preventive care.

 The Bottom Line: Opaque billing and misleading practices hurt patients and increase costs. Texas must continue to strengthen transparency measures to make health care more affordable for both patients and employers.