Most States Fail to Make the Grade in Health Care Price Transparency for Consumers

New public report card looks in-depth at laws in all 50 states and gives only two states an “A” and 36 a “D” or “F”

WASHINGTON and SAN FRANCISCO – MARCH 18, 2013 – A new Report Card on State Price Transparency Laws developed by two non-profits – Catalyst for Payment Reform(CPR) and the Health Care Incentives Improvement Institute (HCI3) – aims to improve the information available to consumers about prices for health care services and encourage further effort in this area. The Report Card takes a comprehensive look at state laws designed to give consumers basic information about the average or expected prices of common health care services and gives only 14 states a “C” or better.

Only two states (Massachusetts and New Hampshire) received an “A” for having met several criteria, including: sharing information about the price of services for both inpatient and outpatient services; sharing price information for both doctors and hospitals; sharing data on a public website and in public reports; and allowing patients to request information prior to a hospital admission. Seventy-two percent of the nation (36 states) met few if any of these criteria and received a “D” or an “F.”

“Health care costs continue to rise and consumers are increasingly being required to take on a growing share of those costs,” said Suzanne Delbanco, executive director of CPR, a non-profit employer coalition who co-sponsored the Report Card. “In this environment, it is only fair and logical to ensure that consumers have the information they need about quality and cost to make informed decisions about where to seek care. There is definitely a role for public policy and state legislation to support these efforts.”

Francois de Brantes, executive director of HCI3 and report card co-sponsor concurred, adding “We know from studies that the price for an identical health care procedure performed in the same city can vary by as much as 700 percent, with no difference in quality. When consumers shop for value, they can help rein in health care costs; but to do this, they first need timely and actionable price information.”

The majority of states have very basic laws requiring average charges to be made public, but charges do not reflect what consumers, employers, and health plans actually end up paying for care. In many cases, the information is only available upon request, placing a considerable burden on the consumer.

“It should be concerning to every lawmaker in the country that 18% of the US economy is shrouded in mystery,” explains de Brantes. “Without price information, how can we possibly expect consumers to act in a value-conscious way? It is a duty of every state to protect its residents from unfair trade practices, and health care consumers are, for the most part, completely left to fend for themselves.”

In the private sector, many health plans, employers, and an increasing number of other vendors have developed consumer price transparency tools that make price information more accessible to consumers. While these tools continue to evolve, none yet meet all of CPR’s Comprehensive Specifications for Consumer Transparency Tools. They also suffer from missing data and many consumers do not have access to them. While private sector progress has been publicized, little has been done to evaluate and compare state level efforts regarding transparency.

Last fall several large national employers, labor, business coalitions and consumer groups issued a call to action to health plans and providers to share price information with consumers. Delbanco noted, “We know there is more plans and providers can be doing. Laws and forthcoming legislation can provide powerful motivation to be more transparent. We hope this report card spurs states to act to help consumers further.”

March 20 Webinar
On March 20 from 1:00-2:00 p.m. ET, CPR and HCI3 will host a webinar to discuss the Report Card on State Price Transparency Laws, examining and grading the price transparency laws in all 50 states. Register at http://catalyzepaymentreform.givezooks.com/events/webinar-on-report-card-on-states-price-transparency-law.

About Catalyst for Payment Reform
Catalyst for Payment Reform is an independent, non-profit organization working on behalf of large employers and other healthcare purchasers to catalyze improvements in the way healthcare services are paid for and to promote better and higher value care in the United States.

About the Health Care Incentives Improvement Institute, Inc.
The Health Care Incentives Improvement Institute, Inc. (HCI3®) is a non-profit multi-stakeholder umbrella organization for Bridges to Excellence® and PROMETHEUS Payment®. The mission of the organization is to create significant improvements in the quality and affordability of health care by developing and implementing programs that recognize and reward physicians, hospitals and other health care providers that deliver safe, timely, effective, efficient, equitable and patient-centered care. HCI3 offers a comprehensive package of solutions to employers, health plans and coalitions to improve the flawed incentives that currently permeate the U.S. health care system.

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