Health care costs are among the most complex and important issues for voters and policymakers alike. A poll by the Kaiser Family Foundation leading up to the 2018 midterm elections found that 71 percent of voters named health care as “very important” to their Congressional vote—more than any other single issue. A plurality of voters also named affordability and cost as their top health care issue for the next Congress.
Policymakers are listening: health care costs have been a primary focus of both Congress and the Trump administration. In particular, there has been an emphasis on lowering health care costs and price transparency.
Health Care Costs Under the Microscope
Americans have repeatedly voiced their desire for policymakers to reduce high health care costs, and Congress has heard their message loud and clear. Sen. Lamar Alexander (R-TN), who does not plan to seek reelection in 2020, has made lowering health care costs a focus of his tenure as chair of the Senate Committee on Health, Education, Labor, and Pensions (HELP).
In 2018, the committee issued a request for information to industry stakeholders on strategies to lower health care costs. In May, the committee released a bipartisan discussion draft of legislation to reduce health care costs. The draft contains a broad array of proposals, from efforts to decrease disparities and improve public health to new transparency requirements. The committee has not voted on the package and it is unclear whether the full Senate or House would support the legislation.
Efforts to Increase Price Transparency
While Congress focuses on lowering health care costs and ending surprise billing, the Centers for Medicare & Medicaid Services (CMS) has taken steps to increase price transparency from hospitals.
The fiscal year (FY) 2019 Inpatient Prospective Payment System (IPPS) final rule included a new requirement that hospitals post a list of their standard charges (or “chargemaster”) online in a machine-readable format. The chargemaster does not show the price patients ultimately pay for their care and is not generally considered the most useful document for patients attempting to predict what they must pay. CMS has not announced an enforcement mechanism for this new requirement, though agency Administrator Seema Verma has encouraged the public to post on Twitter instances in which a hospital is not in compliance using #WheresThePrice.
The White House also has shown interest in the topic. In June, President Trump signed an executive order on price transparency that instructed the Department of Health and Human Services (HHS) to issue a proposal, within 60 days, requiring hospitals to publicly post standard charge information—including charges based on negotiated rates—in a machine-readable format understandable and usable by consumers. The order also stated HHS should solicit feedback on a proposal requiring insurance companies and providers to supply cost-of-care information, including expected out-of-pocket costs, to patients before they receive care.
Case Study: Colorado
As policymakers grapple with health care costs on the federal level, some states are leading the way in increasing transparency. Colorado Gov. Jared Polis (D) recently signed legislation requiring hospitals to make more financial information publicly available, including:
- inpatient and outpatient statistics;
- bad debt and charity write-offs;
- operating expenses;
- balance sheets;
- staffing information; and
- transaction prices of acquired hospitals.
The Colorado Hospital Association supported the bill, which uses publicly available data when possible to reduce administrative burden on hospitals.
Issues related to health care costs are complicated and involve multiple stakeholders, including hospitals and patients. It is crucial that lawmakers at the federal and state levels carefully consider policy alternatives and make decisions that put patients first while ensuring essential hospitals can fulfill their missions.
For tools essential hospitals can use to initiate and improve conversations about the cost of care between patients and clinicians, visit talkcostofcare.org.