Provider responses to online price transparency

An Analysis of Community-Level Socioeconomic Status Effects on Pricing Transparency and Variability of Hand Surgery Procedures

BACKGROUND

The hospital price transparency final rule requires hospitals to publish pricing information about provided items and services by means of 2 methods: (1) a comprehensive machine-readable file and (2) a display tool of selected shoppable services. Using machine-readable files on hospital websites, the authors examined trends in pricing transparency and variation in association with community-level socioeconomic factors for 3 common hand surgery procedures among Association of American Medical Colleges-affiliated hospitals.

METHODS

Available discount cash prices and payer-specific negotiated prices for CPT codes 64721, 26615, and 25111 were recorded. Multivariate analysis was used to stratify hospitals into 2 groups based on their area's median household income, percentage uninsured, and geographic practice cost index practice expense scores. Generalized linear mixed effects modeling was used to evaluate price variability against community-level financial characteristics of the patient population.

RESULTS

Of hospitals that met selection criteria, a majority did not display discount cash prices and payer-specific negotiated prices for the 3 procedures. Hospitals in lower-income areas and areas with a higher percentage of the uninsured tended to charge a higher average payer-specific negotiated price for CPT code 25111. They also tended to have greater variation in payer-specific negotiated prices than hospitals found in higher-income and lower-percentage-uninsured areas.

CONCLUSIONS

This study demonstrates that considerable pricing variation and incomplete transparency exists for CPT codes 64721, 26615, and 25111 among Association of American Medical Colleges-affiliated hospitals. Patients in lower-income and higher-percentage-uninsured areas are more exposed to a higher variability and average of negotiated prices than those in higher-income areas, which may translate to higher out-of-pocket costs for those with higher coinsurance and less socioeconomic prowess.

Employer Strategies for Health Care Price Transparency

This paper describes hospital, insurance, and pharmaceutical price transparency policies and applications in the United States and in selected countries around the world. Many of these policies apply to self-insured employers. So far, the experience in the United States and elsewhere is clear that federal and state price transparency regulations have had little impact on whether employees or dependents search for low-cost or high-quality providers or on the cost and quality of their health care. This is because of weak regulatory oversight, conflicting federal and state reporting requirements, and few economic incentives for providers and insurance companies to supply easily readable or analyzable price information. However, price transparency requirements are here to stay. This paper therefore offers several recommendations to maximize the utility of price transparency tools provided for employees and other insureds, by their employers, providers, commercial insurance carriers, or technology firms. From a policy perspective, coupling reporting requirements with clearer technological guidance and much stronger regulatory oversight would increase the utility of price transparency efforts. For individual employers, the impact of price transparency efforts may increase by coupling price transparency tools with health plan network and design strategies, behavioral economic nudges, and programs designed to improve health, well-being, and quality of care. Many program vendor partners, consultants, and actuarial, technology, and research firms can help make these efforts useful.

Healthcare price transparency in North America and Europe

Healthcare price transparency is an effort to inform patient decision-making, but also to decrease prices and their variation across healthcare systems for equivalent medical services. The initiative is meaningful only for medical services that are shoppable-such as imaging examinations-for which patients incur out-of-pocket costs. Therefore, several countries in which patients commonly share a portion of their healthcare costs have been implementing mandates to improve healthcare price transparency. However, the provisional implementation has many issues, especially in the United States, including provider non-compliance and limited accessibility of price transparency tools by the general public. Many of the existing tools are not user-friendly, are difficult to navigate, focus on charges and health plan negotiated rates rather than patients' out-of-pocket costs, and disclose prices on the service level instead of per episode of care. As such, the disclosed amounts are often not reliable. Many price transparency tools also lack valid and measurable quality metrics, which can result in a selection of high-cost care as a proxy for high-value care, as well as an increase in healthcare prices when providers want to imply they offer high-quality care. Nevertheless, the impact of the initiatives on patients' decision-making and healthcare costs remains unclear. While transparency initiatives are patient-centric, efforts should be made to increase patient engagement, provide accurate patient-specific out-of-pocket cost information, compare available treatment and provider alternatives, and couple price information with quality metrics to enable making fully informed decisions.

The impact of hospital price and quality transparency tools on healthcare spending: a systematic review

BACKGROUND

Global spending on health was continuing to rise over the past 20 years. To reduce the growth rates, alleviate information asymmetry, and improve the efficiency of healthcare markets, global health systems have initiated price and quality transparency tools in the hospital industry in the last two decades. OBJECTIVE : The objective of this review is to synthesize whether, to what extent, and how hospital price and quality transparency tools affected 1) the price of healthcare procedures and services, 2) the payments of consumers, and 3) the premium of health insurance plans bonding with hospital networks.

METHODS

A literature search of EMBASE, Web of Science, Econlit, Scopus, Pubmed, CINAHL, and PsychINFO was conducted, from inception to Oct 31, 2021. Reference lists and tracked citations of retrieved articles were hand-searched. Study characteristics were extracted, and included studies were scored through a risk of bias assessment framework. This systematic review was reported according to the PRISMA guidelines and registered in PROSPERO with registration No. CRD42022319070.

RESULTS

Of 2157 records identified, 18 studies met the inclusion criteria. Near 40 percent of studies focused on hospital quality transparency tools, and more than 90 percent of studies were from the US. Hospital price transparency reduced the price of laboratory and imaging tests except for office-visit services. Hospital quality transparency declined the level or growth rates of healthcare spending, while it adversely and significantly raised the price of healthcare services and consumers' payment in higher-ranked or rated facilities, which was referred to as the reputation premium in the healthcare industry. Hospital quality transparency not only leveraged private insurers bonding with a higher-rated hospital network to increase premiums, but also induced their anticipated pricing behaviors.

CONCLUSION

Hospital price and quality transparency was not effective as expected. Future research should explore the understudied consequences of hospital quality transparency programs, such as the reputation/rating premium and its policy intervention.

Large variations in hospital pricing for standard procedures revealed

Objective

The CMS mandated hospital price transparency reporting on January 1, 2021 aiming to empower patients, enhance market competition, and curtail healthcare costs in the US. We aimed to characterize variability in hospital pricing reported by 1982 hospitals on six standard procedures (including abdominal ultrasound, diagnostic colonoscopy, kidney function blood test panel, knee arthroscopic cartilage removal, magnetic resonance imaging scan of brain, and pelvis computed tomography scan with contrast), with a particular focus on variations in pricing by insurance plan type.

Results

We found substantial heterogeneity across insurance plan types. The minimum number of prices reported was 18,679 for knee arthroscopic cartilage removal (reported by 908 hospitals, average = 21 prices/hospital), while the maximum number of prices reported was 44,921 for abdominal ultrasound (reported by 1861 hospitals, average = 24 prices/hospital). In general, reported hospital pricing was highest for the list price, followed by cash price and prices negotiated with commercial insurance plans. Government insurance, including Medicare, Medicaid and Veterans/Tricare plans, had much lower prices. However, prices were very heterogeneous with substantial overlaps between pricing for all plan types. The coefficients of variation for all procedures exceeded 100%, ranging from 106% for knee arthroscopic cartilage removal to 397% for kidney function blood test panel.

Supplementary Information

The online version contains supplementary material available at 10.1186/s13104-022-06014-2.

Changing Energy Supplier on the Market with a Strong Position of Incumbent Suppliers—Polish Example

The purpose of the study is to identify factors affecting the intention to change an energy supplier. This is in a country, Poland, where competition in the energy market has been intensifying over several years, but incumbent suppliers still have an extremely strong position on the market, and the tendency to change an energy supplier is relatively low. The survey was conducted in 2020 on a sample of 1216 adults. The research results were used for a multigroup SEM (Structural Equation Modelling) analysis using AMOS 26. The main findings indicated a strong impact on a general image of a company, as well as the lack of importance of a green image of the current energy supplier. In the general research approach, there are no visible differences in the impact of the perceived price transparency on the intention to switch the supplier. However, taking into consideration two groups (a low energy bill vs. a high energy bill), some interesting differences are visible. In the markets with low consumers’ intention to switch, the strong position of incumbent suppliers is due to their exceptionally strong image in these markets. Spending time on maintenance is the biggest disadvantage for new energy suppliers who, when entering the market, have to look for differentiators.

Taking the Pulse of Hospitals' Response to the New Price Transparency Rule

As of January 1, 2021, most U.S. hospitals are required to publish pricing information on their website to promote more informed decision making by consumers regarding their care. In a nationally representative sample of 470 hospitals, we analyzed whether hospitals met price transparency information reporting requirements and the extent to which complete reporting was associated with ownership status, bed size category, system affiliation, and location in a metropolitan area. Fewer than one quarter of sampled hospitals met the price transparency information requirements of the new rule, which include five types of standard charges in machine-readable form and the consumer-shoppable display of 300 shoppable services. Our analyses of hospital reporting by organizational and market attributes revealed limited differences, with some exceptions for nonprofit and system-member hospitals demonstrating greater responsiveness with respect to the consumer-shoppable aspects of the rule.

Online Advertising Increased New Hampshire Residents' Use Of Provider Price Tool But Not Use Of Lower-Price Providers

Insurers and policy makers have created health care price transparency websites to facilitate price shopping and reduce spending. However, price transparency tools to date have been plagued by low use. It is unclear whether this low use reflects a lack of interest or a lack of awareness. We launched a large online advertising campaign to increase consumers' awareness about insurer-specific negotiated price information available on New Hampshire's public price transparency website. Our campaign led to a more than 600 percent increase in visits to the website. However, in our analysis of health plan claims, this increased use of the website did not translate to increased use of lower-price providers. Our findings imply that the limited success to date of price transparency tools in reducing health care spending is driven by structural factors that limit consumers' ability to use health care price information as opposed to only a lack of awareness about price transparency tools.

Survey of Hospital Chargemaster Transparency

BACKGROUND

In January 2019, the Centers for Medicare & Medicaid Services (CMS) required hospitals to list their standard charges (chargemasters) publicly in an effort to increase price transparency in health care. Surveying hospital chargemasters may be informative to assess the implementation of this rule and its utility to consumers.

OBJECTIVE

We aimed to compare hospital chargemaster data within a local hospital market where patients would reasonably try to shop or compare services.

METHODS

We identified and aggregated Dallas County hospital chargemasters available in a database compatible format in May 2019. We manually examined a convenience sampling of 10 common laboratory tests, medications, and procedures.

RESULTS

Thirteen hospital chargemasters were identified. Eleven hospitals had chargemasters available in a database compatible format (xlsx or csv). These 11 chargemasters were aggregated into a single file containing 155,576 chargeable items, prices, and descriptions. We observed heterogeneous names and descriptions of synonymous items across institutions, preventing automated comparisons. The examined items revealed a high variation in charges. The largest charge variation for laboratory tests examined included a 2,606% difference (partial thromboplastin time: $18.70-506.00), for medications an 18,617% difference (5-mg tablet of amlodipine: $0.23-43.05), and for procedures a 2,889% difference (circumcision: $252.00-7,532.10). One institution accounted for 27% of the lowest prices and another accounted for 60% of the highest prices.

CONCLUSION

Chargemaster data presentation varied among the hospitals surveyed, making automatic comparison impossible. Chargemaster data are difficult to interpret for health care decisions. Refining the minimum requirements for publishing chargemaster data could increase their utility.

Discovering healthcare provider behavior patterns through the lens of Medicare excess charge

BACKGROUND

The phenomenon of excess charge, where a healthcare service provider bills Medicare beyond the limit allowed for a medical procedure, is quite common in the United States public healthcare system. For example, in 2014, healthcare providers charged an average of 3.27 times (and up to 528 times) the allowable limit for cataract surgery. Previous research contends that such excess charges may be indicative of the actual amount that providers bill to non-Medicare patients and subsequent cost-shifting behavior, where a healthcare provider tries to recoup underpayment by Medicare from privately insured, self-pay, out-of-network, and uninsured patients.

OBJECTIVES

The objective of this study is to examine the drivers of a provider's excess charge patterns, especially the extent to which the degree of excess charges may be associated with physician characteristics, Medicare reimbursement policy, or socioeconomic status and demographics of a provider's patient base.

METHODS

Using data from the 2014 Medicare Provider Utilization files, we identify three procedures with the highest variation in Medicare reimbursements to study the excess charge phenomenon. We then employ a two-step cluster analysis within each procedure to identify distinct provider groups.

RESULTS

Each procedure code yielded distinct healthcare provider segments with specific patient demographics and related behavior patterns. Cluster silhouette coefficients indicate that these segments are unique. Three random subsamples from each procedure establish the stability of the clusters.

CONCLUSIONS

For each of the three procedures investigated in this study, a sizeable number of healthcare providers serving poorer, riskier patients are often paid significantly lower than their peers, and subsequently have the highest excess charges. For some providers, excess charges reveal possible cost-shifting to private insurance. Patterns of excess charges also indicate an imbalance of market power, especially in areas with lower provider competition and access to health care, thus leading to urban-rural healthcare disparities. Our results reinforce the call for price transparency and an upper limit to overbilling.

The impact of price transparency on consumers and providers: A scoping review

Escalating levels of healthcare spending and price variation in the healthcare market have driven government and insurer interest in price transparency tools that are intended to help consumers shop for services and reduce overall healthcare spending. However, it is unclear whether the objectives of price transparency are being achieved. We conducted a scoping review to synthesize the impact of price transparency on consumer, provider, and purchaser behaviours and outcomes. Price transparency tools had weak impact overall on consumers due to low uptake, and mixed effects on providers. Price-aware patients chose less costly services that led to out-of-pocket cost savings and savings for health insurers; however, these savings did not translate into reductions in aggregate healthcare spending. Disclosure of list prices had no effect, however disclosure of negotiated prices prompted supply-side competition which led to decreases in prices for shoppable services.