Transparency in Health Care

Consumers in California can now comparison shop for health care services following a new federal requirement that hospitals must post prices online. In 2019, hospitals in California must now post costs for medical services online, responding to a new federal requirement that took effect January 1.

Previously, under the Affordable Care Act, hospitals were required to release public price lists. However, this new rule requires hospitals to post these prices online in a format that can be downloaded to computers. These prices must be updated every year and the change also applies to rehabilitation facilities, psychiatric hospitals and critical access hospitals.

But will this new requirement actually help people more effectively comparison shop for health care? While access to hospital charges will provide people a starting point, the information might not help the millions of people with health insurance. That’s because hospital charges are the amount people pay out of pocket for care, rather than the rates health plans have negotiated with care providers and facilities.

There is a concern that the price lists could cause confusion, as the prices on a hospital's website may not match those paid by their insurance provider, or Medicare. Also some not-for-profit hospitals calculate their rates according to a patient’s income, which will differ from the posted prices.

Still – this new requirement is important because transparency is important. For too long, people have had limited access to information about the quality of their health care choices and the costs associated with visiting a doctor or hospital. This lack of transparency is costing the U.S. health care system billions of dollars, while leaving people in the dark. Providing health care prices to people, health care professionals and other stakeholders could help reduce U.S. health care spending by more than $100 billion over the next decade, according to a report by the Gary and Mary West Health Policy Center. When people are empowered with information about quality and cost, they make more informed choices - helping costs to go down.

People are starting to take action and many are already effectively comparison shopping for health care, as over one-third (36 percent) of Americans have used the internet or mobile apps during the last year to compare the cost of medical services; this is more than double from 14 percent in 2012, according to the 2018 UnitedHealthcare Consumer Sentiment Survey. People who use online/mobile transparency resources are more likely to select high-quality health care providers across all specialties, while on average saving 36 percent compared to those who are not online.

UnitedHealthcare is a great example of transparency tools in action. For more than a decade, UnitedHealthcare has created resources to help people comparison shop for health care based on quality and cost. Today, customers and plan participants can access quality and cost estimates that are customized based on their specific health plan and reflect actual contracted rates with health care providers and facilities. The online and mobile resources provide independently validated quality metrics alongside actual patient ratings, while in some cases enabling people to earn financial incentives for simply accessing the estimates.

A public website, uhc.com/transparency, enables all Americans to access market average prices for nearly 800 common medical services, providing a starting point for people looking to research health care costs in their local area.