Hospitals weigh in on "pricing transparency"

With the American Hospital Assn. voting in favor of a resolution promoting price transparency, hospitals, physicians and health plans are now all supportive of the issue.

They all are on record as saying making charge information available will enable people to make better decisions as they take on more financial responsibility for their care in consumer-directed health plans, including health savings accounts.

Now all parties are trying to determine what specific information should be presented, and how and where it should be presented.

At its annual meeting in Washington, the AHA's board of trustees announced a policy that supports federal requirements for states to work with their hospital associations to make hospital charge information available to consumers. The policy also encourages requirements for states to work with insurers to make information available about expected out-of-pocket costs before medical visits.

AHA President Dick Davidson said that similar efforts are already underway in several states. Individual hospitals also have launched efforts to post pricing information online for certain procedures. "But more can and should be done to share this type of information -- one of a number of factors in choosing a hospital or health plan -- with consumers," he said in a prepared statement.

AHA spokeswoman Amy Lee said the hospital industry was hopeful that potential competitive issues could be addressed by examining pricing transparency at the state level. That's because local hospitals would work together to develop the guidelines about what would be disclosed.

The hospital association acknowledged that there is still uncertainty about exactly what type of pricing information is going to be most helpful to consumers. And other health care industry organizations are still shaping their policies and guidance on the issue.

The American Medical Assn. has several policies encouraging physicians to provide patients with adequate fee information and supporting the idea that more pricing information from physicians, hospitals, insurers and others will lead to better decision-making in health care. At its annual meeting in June, the AMA's House of Delegates is expected to be presented with a report regarding price transparency.

William G. Plested, MD, president-elect of the AMA, talked about the need for transparency from all health care sectors in a letter dated Feb. 28 that was published in the Wall Street Journal.

"We agree -- there shouldn't be a mystery about medical prices," he wrote. "But just calling on physicians to post their fees will not provide many clues to the actual cost of health care. If we want patients to become more prudent purchasers of health care, they need to be in greater control of their own health insurance choices and decisions, and need price transparency from all sectors of the health care system as well."

For its part, the insurance industry says several managed care companies are already providing tools on their Web sites that allow enrollees to see estimated costs of specific services in specific markets.

America's Health Insurance Plans spokesman Mohit Ghose said the trade association supports the idea of combining pricing and quality transparency to help consumers make better choices. "Consumers have to have quality and price information to make a relevant decision. Just picking the lowest price does not mean you're picking the highest quality," he said.

Aside from helping consumers, Ghose said increased transparency could be a boon to insurance companies as consumers shop for health plans that have the information they are seeking. "It is a competitive issue. The more value you can show, the more likely you are to have a better value for your business," he said.

Paul Ginsburg, PhD, president of the Center for Studying Health System Change, said physicians, hospitals and insurers won't have a choice about whether they participate in such efforts. They "are not in a position to withhold price information. That's what's changed."