NU Online News Service, June 22, 2004, 4:18 p.m. EDT

Making hospitals disclose prices could backfire.[@@]

Paul Ginsberg, an economist who serves as president of the Center for Studying Health System Change, Washington, made that argument today in testimony at a hearing of a U.S. House Ways and Means subcommittee on hospital pricing practices, according to a written summary of his remarks.

Patients might choose lower-priced care if hospitals disclosed the discounted rates they have agreed to charge specific health plans, but widespread disclosure of the discounted rates could increase hospitals’ negotiating power, Ginsberg warned.

“Greater price transparency would benefit the more concentrated side of the market,” Ginsberg said. “At the local market level, hospitals often are more concentrated than health plans, meaning price transparency would tend to lead to higher prices for hospital care and thus higher health insurance premiums.”

Letting health plans put lower-priced hospitals in “preferred” tiers probably would help patients more while preserving plans’ ability to bargain for lower hospital prices, Ginsberg said.