Americans are prolific shoppers, constantly on the lookout for the best price for top-quality products and services. If you are searching for a new television, it’s easy to find prices and statistics transparently and prominently displayed at just about every store.
Yet when it comes to maintaining our health, very few of us ever know price or quality before receiving a health care service. This is true whether it’s a simple visit to the doctor, a cancer screening, or a knee replacement.
One reason health care costs continue to skyrocket is that the prices and quality of care are largely hidden from patients. That means health care providers don’t compete on cost or quality.
This is unacceptable. By 2026, health care spending is projected to consume 20 percent of the economy. Doing more of the same won’t fix this problem, so we must move our health care system onto a different trajectory.
Americans need access to information to make the best health care decisions for themselves and their families. This is why transparency in health care price and quality is a top priority for the Centers for Medicare and Medicaid Services.
If people don’t know the cost or quality of health care services, they cannot seek out the highest quality services at the lowest cost, as they do in any other industries. Today, patients are essentially shut out of the process of defining value, when they should be at the center of it.
Even people covered by Medicare, who have significant protections against practices like balance billing and out-of-network charges, are sometimes surprised by their costs or are in the dark when it comes to opportunities to save money.
One aspect of CMS’ price transparency initiative has received a great deal of attention recently. Our updated guidelines now require hospitals to post a list of their current “standard charges” on the internet in a machine-readable format — meaning the data can not only be read electronically but can also be imported or read into other databases. Previously, CMS required hospitals to make their standard charges available in response to an inquiry, but too often this meant making the information available only in print or a PDF that couldn’t be aggregated with other data and that wasn’t broadly available.
The new requirement sets the stage for third parties to use the charge data to develop tools and resources that are more meaningful and actionable, making it easier for people to access and compare information about costs between different facilities.
The charge lists, coupled with CMS’ already published hospital star ratings on quality, give Americans more information than ever before about the services provided by their local hospitals.
The information hospitals are posting now isn’t necessarily what individuals will pay under their insurance policies, but it is an important first step, and there’s no reason hospitals can’t do more. Hospitals don’t have to wait for CMS or other agencies to go further in helping their patients understand the value of care they deliver. In fact, some hospitals and insurers have gone well beyond the current requirements and provide insurance-specific pricing information or aggregate cost and quality data for consumers.
The University of Utah, for example, has an Estimate Your Out-of-Pocket Costs tool that combines chargemaster prices with individual’s insurance information. UCHealth in Colorado offers individualized estimates through its patient portal or a mobile app, and opened a dedicated call center for price transparency.
I hope that the attention this policy is getting creates an awareness of the new requirements by highlighting both hospitals that are exceeding expectations to empower consumers and those that are not. Patients can be a powerful force to hold the health care system accountable for transparency. CMS encourages people to scan their local hospital’s website for pricing information and share the results on Twitter using the hashtag #WheresThePrice.
The new requirement for hospitals to post their charges is just one of the numerous price transparency steps CMS has taken over the past year. As part of its eMedicare initiative, CMS launched a tool to help beneficiaries evaluate the cost differences between Medicare Advantage and traditional Medicare.
We also launched Procedure Price Lookup, the first Medicare price transparency tool that allows beneficiaries to compare the national average of Medicare payments and copayments for certain procedures that are performed in both hospital outpatient departments and ambulatory surgical centers. There are significant differences in costs between these settings, and the lookup allows beneficiaries to find information that will help them decide where to get care.
To bring more transparency to prescription drug costs, President Trump signed legislation last October to end the practice of pharmacy gag clauses. Those agreements kept pharmacists from telling patients if they could get a prescription drug cheaper by paying cash instead of getting the drug through their health insurance plan. CMS has also proposed requiring pharmaceutical companies to disclose the list price of drugs in TV ads, and also requiring every Medicare Part D plan to adopt a real-time tool to help doctors understand what their patients will pay for the drugs they prescribe.
We are also working toward providing consumers quality and price information side by side as another way to empower them to find high-value care.
As the administrator of CMS, my focus is on putting patients first. They are the most powerful force in our health care system for driving toward higher value care.
While the work we have done to empower patients by increasing transparency is making great strides, we are just getting started as we work to increase price and quality transparency throughout the health care system.
Seema Verma is the administrator of the Centers for Medicare and Medicaid Services.