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  • Washington Highlights

    House Energy and Commerce Oversight Subcommittee Holds Hearing on How to Improve Health Care Cost Transparency

    Len Marquez, Senior Director, Government Relations

    The House Energy and Commerce Subcommittee on Oversight and Investigations July 17 held a hearing titled, “Examining State Efforts to Improve Transparency of Health Care Costs for Consumers.” The hearing focused on state laws and policies to improve health care costs, with price transparency being a central theme throughout the hearing.

    Witnesses included Jaime King, PhD, JD, professor, University of California (UC) Hastings College of the Law in San Francisco, associate dean and co-director, UCSF/UC Hastings Consortium on Law, Science and Health Policy; and Michael Chernew, PhD, Leonard D. Schaeffer professor of health care policy, director, Healthcare Markets and Regulation Lab, Department of Health Care Policy, Harvard Medical School.

    In opening the hearing, Subcommittee Chair Gregg Harper (R-Miss.) said, “As health care costs continue to rise, many Americans still have no idea how much something will cost them before they receive care. Often times they only know their out-of-pocket costs once they’ve gotten the care and get their bill weeks, sometimes months later.”

    In his remarks, Chernew discussed studies that have found that price transparency tools have had minimal effects on cost and market behaviors. He said that this is due to four factors: the complexity of health care, physician recommendations may outweigh cost information when patients make decisions about where to receive care, consolidation of health care entities may limit competition, and insurance may mask the importance of cost because patients care most about their out-of-pocket costs. While price transparency tools are important, Chernew emphasized the need for caution, “I worry that some transparency advocates, in their zeal to help markets work, will override what markets are doing ... health care is sufficiently complex that our intuition about how consumers and markets will behave may not be correct.”

    Similarly, King discussed the limited benefit of many price transparency tools in bending the cost curve. In her remarks, King discussed the legal barriers of many price transparency tools and recommended “[that] Congress should narrow ERISA [Employee Retirement Income Security Act of 1974] preemption to exclude state health reform efforts that do not unduly burden ERISA’s goal of uniformity for employer-based benefit plans, while also granting states sufficient flexibility to achieve their health reform goals.”

    The AAMC May 14 sent a letter detailing price transparency recommendations to a bipartisan group of senators [see Washington Highlights, May 18]. Those recommendations include broadening the conversation about price transparency to include appropriate contextual information, engaging with a variety of stakeholders to ensure broad consensus and buy-in from the health care industry, making comprehensive claims data available to all providers, and taking into account the unique costs of teaching hospitals due to their complex patient mix and their high-cost standby capacity such as trauma centers, intensive care units, and burn treatment units.