States Begin Requiring Hospitals To Disclose Prices For Services

Main Category: Public Health
Article Date: 18 Oct 2007 - 10:00 PDT

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Several states, in an effort "to make the health care system more efficient," have begun requiring hospitals to disclose prices paid for services, the Milwaukee Journal Sentinel reports. According to the Journal Sentinel, three states "are at the forefront of providing more information on hospital prices and how they can vary":

• New Hampshire is disclosing the median amount specific health plans pay hospitals or clinics for about 30 common procedures;
  
  
• Oregon is disclosing median prices for more than 80 procedures at hospitals; and
  
  
• Massachusetts next spring will begin disclosing average prices health plans pay hospitals and health clinics for common procedures. In addition, the state's Health Care Quality and Cost Council wants to provide information on what health plans pay specific hospitals and health clinics for services.
  

Such price disclosures could become increasingly important as high-deductible health plans become more common and people are required to pay a percentage of their hospital bills through co-insurance, the Journal Sentinel reports. Proponents of consumer-driven health care believe that such disclosures will increase competition, which will encourage physicians and hospitals to improve quality and control costs, according to the Journal Sentinel.

However, "hospitals have scant incentive to lower prices under the current system since it doesn't mean they will attract more patients," the Journal Sentinel reports. According to health economist Robert Town, more health plans need to be designed to encourage price comparisons. "Price transparency by itself isn't necessarily going to get you anywhere," Town said, adding, "But price transparency with incentives might work to lower prices" (Boulton, Milwaukee Journal Sentinel, 10/14).

Reprinted with kind permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation© 2005 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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