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Panel Considers Health Price Disclosure Proposals

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Making doctors and hospitals publish their prices could help consumers shop for care but also could help providers increase their prices.

Witnesses talked about that possibility today during a hearing on health care “pricing transparency” bills organized by the House Energy and Commerce Committee’s health subcommittee.

Rep. Steven Kagen, D-Wis., an allergist, has introduced one of the bills, H.R. 4700, the Transparency in All Health Care Pricing Act.

Others health price disclosure bills include H.R. 2249, the Health Care Price Transparency Promotion Act, and H.R. 4803, the Patients’ Right to Know Act

If implemented as written, H.R. 4700 would require all individuals and businesses that sell medical products or services to the public to disclose all of their prices.

“There is no reason patients should be prevented from knowing the price of a pill before they buy it – and knowing what the person in line in front of them is paying for the same prescription,” Kagen said, according to a written version of his testimony posted on the committee website.

Some talk about requiring only publication of average prices, but “who among us wants to receive average care or receive the average change when we buy something?” Kagen asks.

Hospitals say they cannot set charges in advance, because they do not know how complicated a given procedure will be, but ordering a sandwich at a fast-food restaurants involves a large number of possible combinations, and the restaurants have figured out how to give consumers specific prices, Kagen said.

If restaurants could “lump” prices, so can hospitals, Kagen said.

Steven Summer, a representative from the American Hospital Association, Washington, told the committee that the new Affordable Care Act package, which includes the Patient Protection and Affordable Care Act and the Health Care Education and Reconciliation Act, is already about to make big changes in health care price disclosure.

Hospitals will have to publish lists of the prices they charge for items and services, including the prices they would typically charge for “Medicare-Severity Diagnosis-Related Groups,” or bundles of services and procedures provided for patients with common conditions, Summer said.

The Centers for Medicare and Medicaid Services now posts information about what it pays hospitals for 35 procedures on the Hospital Compare website, Summer says.

Michael Cowie, a partner in the Washington office of Howrey L.L.P., told the committee that well-meaning efforts to require health care price disclosure could backfire.

Cowie has worked as a Federal Trade Commission antitrust investigator.

“Collusion among companies to raise prices is more likely in industries where pricing terms are known among competitors,” Cowie said, according to the written version of his remarks. “If a company knows how its rivals set prices, that company may raise its own prices to meet those of its competitor. Why work to undercut the competition if you know customers will pay a higher price?”

Links to more information about the health price hearing, including links to the written versions of the witnesses’ testimony, are available here.


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