Price transparency is critical to fix nation’s health care model, Brown scholar

WASHINGTON, D.C. [Brown University] — The United States spends more money on health care than any nation in the world, but not because its leaders are investing more in patient care. Rather, it’s due largely to high and variable prices — and the cost of health care continues to rise.

In testimony given on Thursday, July 11, before Congress, Brown University public health researcher Christopher Whaley shared research findings of his own and from other scholars about the high costs of health care and explained why price transparency is crucial to fixing the system.

“It’s important to recognize that price transparency is not a cure-all for the health care system, but rather is critical to improve the efficiency and regulatory oversight of health care markets in United States,” said Whaley, an associate professor of health care policy at the Brown University School of Public Health.

Whaley was one among a panel of experts who testified in a U.S. Senate Special Committee on Aging hearing titled “Health Care Transparency: Lowering Costs and Empowering Patients.” Whaley, who is affiliated with the Center for Advancing Health Policy through Research at the School of Public Health, was invited to testify given his focus on health care price transparency and the evolving structure of U.S. health care markets.

While high spending may be seen as a signal of higher investment in patient care, research shows that hospital costs are driven by provider consolidation and are actually not driven by differences in quality of care, Whaley noted.

Rising health care spending strains government finances and erodes worker wages, particularly for middle- and lower-income Americans, Whaley said. Hospital prices are variable and opaque, he added, fueling consolidation, eroding access to care and the quality of care, and leading to patient frustration.

Price transparency is critical for enabling employers and other insurance purchasers to provide health insurance benefits to the workforce at fair prices, Whaley said.

“An appropriate use of price transparency is to serve as a hub that enables other benefit design innovation and inform policies that reduce spending and improve quality,” he said.

Whaley acknowledged that policymakers have undertaken efforts to increase price transparency, and shared examples of innovative uses of price transparency data to lower prices for patients, save money for public funds and insurance payers, and redirect savings to employees.

Whaley noted, however, that many of those efforts are currently incomplete. He urged lawmakers to build on the efforts, and suggested additional improvements to pricing data management and accessibility through federal requirements as well as through proposed bipartisan legislation.

“Federal policies to improve transparency are important first steps,” Whaley said, “and I believe that building on these efforts will improve the U.S. health care system and lower spending, particularly for aging Americans.”