States Continue to Push for Hospital Price Transparency

In their seminal book on the American health care system, legendary investigative reporters Donald L. Barlett and James B. Steele offered a disturbing metaphor for the illogical nature of medical pricing in 2004’s Critical Condition: How Health Care in America Became Big Business & Bad Medicine:

“You are standing in line at a supermarket to buy a box of Cheerios. You notice that the two customers in front of you are making the same purchase. The cashier rings up the first box at $5.41, just as advertised in the newspaper. But when the second box is scanned, the price registers $6.76. Strange, you think. Even more strange, the customer doesn’t seem to notice the difference. Then it’s your turn. The cashier scans the box, and the price flashes $29.92. Why would anyone pay more than five times as much as another person for an identical box of cereal? They wouldn’t. But when it comes to health care, you don’t have any choice. And that’s precisely the kind of spread that the hospitals use in selling their services. Except you don’t know it—it’s their secret.”

The reporters conclude: “In the supermarket, you know precisely what every other customer pays for a box of cereal or a can of soup. But in the health care industry, that information is difficult, often impossible, to come by.”

Outrages like this led to a movement for hospital price transparency to allow Americans to know how much hospital services cost before they receive them. Since 2021, hospitals in the United States have been required to publicly post their standard charges and negotiated rates for services and procedures.

But the issue still remains a priority for state legislators across the country. Since the beginning of the year, nearly 40 measures referring to “hospital price transparency” have been introduced in 19 states,” according to the LexisNexis® State Net® legislative tracking system.

Among those bills is Pennsylvania’s HB 2339, which would require hospitals in the Keystone State to publish a list of their standard costs of services on their websites, and if they failed to do so, it would bar them from collecting medical debt from patients and from reporting that debt to credit reporting agencies.

“Our bipartisan bill protects the public by ensuring hospitals are playing by the rules when it comes to being up front about costs to consumers,” Rep. Tarik Khan (D), HB 2339’s primary sponsor, said in a press release in mid-June after the measure passed out of the House Health Committee.

“Most families in my community are paying thousands in out-of-pocket costs when they seek hospital care, and these are the ones that are already insured. At the very least, Pennsylvanians should be able to know ahead of time what the costs are so they can plan ahead and shop around for care when possible. Our bill ensures hospitals follow federal guidelines for price transparency—which should be the bare minimum in our commonwealth.”

Several measures dealing with hospital price transparency have already been enacted this session, including Florida’s HB 7089, part of Senate President Kathleen Passidomo’s (R) Live Healthy initiative. The bill requires hospitals to post on their websites “a consumer-friendly list of standard charges for at least 300 shoppable health care services,” meaning those that can be scheduled ahead of time by health care consumers. The measure also requires insurers to provide an “advanced explanation of benefits,” including “detailed coverage and cost-sharing information,” as required by the federal No Surprises Act, and prohibits hospitals from taking “extraordinary collection action” against patients with unpaid bills, including selling their debt to a third party or reporting the debt to a credit bureau.

“When Floridians are facing a challenging health care diagnosis, the last thing we want for any family is to struggle even more because of exorbitant medical debt, or unclear, unexpected medical bills,” Sen. Jay Collins (R), the author of the Senate counterpart to HB 7089 (SB 1502), said in a press release. “This legislation will go a long way to increase transparency so patients have a better understanding of costs and protection from onerous debt collection practices.”

Hospital Price Transparency Active Issue in State Legislatures

Nearly 40 bills referring to “hospital price transparency” have been considered in 19 states this session, according to the LexisNexis® State Net® legislative tracking system. Five of those states have enacted such measures.

Despite Advances, Improvement Still Needed

A recent report by the U.S. Public Interest Research Group or (PIRG) into how price transparency rules are being employed in practice found lots of room for improvement.

In the report, Post the Price: Hospital Price Transparency Could Save Patients Thousands, PIRG researchers examined the prices at four hospital systems in the Cleveland area.

“Between February and April 2024, our researchers looked for prices for a total knee arthroplasty, better known as total knee replacement surgery,” the report states. “This common, minimally invasive procedure is performed almost 850,000 times each year in the U.S., and is one of the procedures for which hospitals should post a price.”

The researchers found “multiple challenges while price shopping for total knee replacement surgeries,” including missing or unclear information and prices that didn’t include surgeon charges.

In the end, PIRG found “a wide range of prices for total knee replacement for hospitals in the Cleveland area.”

“The lowest self-pay price,” the report said, “was $26,324 at MetroHealth and the highest was $242,121 at the two SummaHealth locations.”

The potential for that much variation in the cost of hospital services—particularly with so many Americans struggling with medical debt—will likely keep legislation coming to help consumers shop around for care.

—By SNCJ Correspondent BRIAN JOSEPH

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