Health Care Price Transparency Meets Antitrust

Consumers are increasingly seeking health care price transparency largely to enable them to shop for health care services, (Kutscher, 2015) and because of a new patient interest in value, stemming from patients paying a larger portion for their health care because of increased deductibles and co-pays. (Betbeze, 2016)  Also, alternative care organizations (ACOs) and similar arrangements wherein the provider accepts more risk for the cost and outcome of medical treatment has providers desiring cost and price transparency to demonstrate their market competitiveness.  (Betbeze, 2016)

One leader in the movement is Blue Cross & Blue Shield of North Carolina who, in 2015, decided to publish the prices it pays to certain facilities for specific procedures and health care services.  Some providers responded negatively to the disclosures because they perceived it made them appear like they were getting a larger amount of money than some patients felt comfortable with for their services. (Betbeze, 2016) One result of the movement is a commoditization of services that are discrete procedures, making them more transactional and market competition pushing the prices for the lower.  Some experts estimate as much as 40% of all health care services will thusly be commoditized in the United States.  If these market forces continue on their current trend, it may make it difficult for many providers to invest in their practices because higher-margin procedures will be more difficult to secure because patients know they are high-margin and will shop around, limiting practice investments to affluent founders or investors. (Betbeze, 2016) 

One of the primary concerns from professionals familiar with cost information from major payers is the denominator of value, which is quality.  They state that while quality standards exist, they are today not married with pricing or cost data making equal comparisons difficult at best. (Kutscher, 2015)  Moreover, patients have actually complained after initial disclosures were made that they sought because the data is difficult for them to interpret such that it appears irrelevant. (Betbeze, 2016)

Another peripheral movement toward health care cost transparency comes from efforts primarily designed to improve health care quality and value. Twenty-two (22) states (See Figure 1) have implemented or are implementing a medical home model, or patient-centered medical home (PCMH), initiative aimed to improve quality and lower costs. (Patient-Centered Primary Care Collaborative, 2016) (AcademyHealth, 2010) To ensure consistent pricing among different insurance companies (payers), insurance companies that typically compete are required to coordinate price lists and/or payment policies, an activity that would typically be prevented by antitrust rules and decrease competition. (AcademyHealth, 2010)

Works Cited

AcademyHealth. (2010). Navigating Antitrust Concerns in Multi-Payer Initiatives. Retrieved from AcademyHealth.Org: https://www.academyhealth.org/files/publications/AntitrustMultipayer.pdf

Betbeze, P. (2016, January 4). Big Ideas: Healthcare Price Transparency: Patients and Payers Versus Providers? Health Leaders Media, pp. http://www.healthleadersmedia.com/leadership/big-ideas-healthcare-price-transparency-patients-and-payers-versus-providers.

Kutscher, B. (2015, June 23). Consumers demand price transparency, but at what cost? Modern Healthcare, p. http://www.modernhealthcare.com/article/20150623/NEWS/150629957.

Patient-Centered Primary Care Collaborative. (2016, May 22). Primary Care Innovations and PCMH Map by State. Retrieved from Patient-Centered Primary Care Collaborative: https://www.pcpcc.org/initiatives/state