Senate Finance Committee Hearing Discusses Transparency in Healthcare Pricing

by King & Spalding
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On June 18, 2013, the Senate Finance Committee held a hearing entitled, “High Prices, Low Transparency: The Bitter Pill of Health Care Costs.”  Senators Max Baucus (D-MT) and Orrin Hatch (R-UT) gave statements on ways to improve transparency and lower healthcare costs in the U.S.  Witness testimony was given by journalist Steven Brill, Contributing Editor, TIME, author of the TIME article, “The Bitter Pill: Why Medical Bills Are Killing Us,” Dr. Suzanne Delbanco, Executive Director of Catalyst for Payment Reform, Dr. Paul Ginsburg, President of the Center for Studying Health System Change and Research Director of the National Institute for Health Care Reform, and Dr. Giovanni Colella, CEO and Co-Founder of Castlight Health, Inc.

The hearing explored several causes of rising healthcare prices, including the consolidation of hospitals and physicians, record high profits for medical device companies, over-utilization of services by physicians seeking to avoid medical liability, and a lack of pricing information and choice for consumers looking for treatment.  Mr. Brill stated that he believes that the unsubstantiated prices listed in hospitals’ “charge masters,” along with highly compensated hospital executives, has led to increased healthcare costs for consumers.  On the topic of transparency, Mr. Brill argued that because CMS has released data to certain non-profits like the American Hospital Association, such information should be available to the general public as well.

Dr. Delbanco spoke about the need for both price and quality transparency to enable consumers to become engaged in making higher value healthcare choices.  Elaborating on this idea of transparency, Dr. Colella suggested that all purchasers of healthcare should have unfettered access to claims, and that the government could establish a public, privacy-protected data repository of pricing information.  Several of the witnesses on the panel agreed that it would be beneficial for Medicare to release its pricing information (called “a gold mine” of data) so that consumers might have a way to compare the cost of care for different services among providers.  Senator Baucus commented that there seemed to be no reason not to release this data, and Senator Ron Wyden (D-OR) added that he and Senator Chuck Grassley (R-IA) were working to add a provision to the Sustainable Growth Rate (SGR) bill on opening up the Medicare database.  Dr. Ginsburg, however, cautioned against transparency for transparency’s sake, saying that pricing information has to be customized to each consumer’s particular health plan, so the insurance companies and employers might be in a better place than the government to provide this information.

Prepared statements and testimonies for the hearing may be accessed here.

Reporters, Lindsey Getman, law clerk, Washington, D.C., and Gary Eiland, Houston, +1 713 751 3207, geiland@kslaw.com.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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