Policymakers on both sides of the aisle have been urging hospitals and other healthcare providers to make their prices publicly available and understandable to patients for years. But since the Trump administration started this effort in 2019, countless hospitals are still non-compliant with federal price transparency mandates. 

In his Topeka Capital-Journal op-ed, physician and AtlasMD co founder Dr. Josh Umbehr explains that “hospitals didn't ignore the rule because it was expensive. They ignored it because they are financially incentivized to keep the information hidden, and the files many hospitals did post were unreadable spreadsheets full of data that were unclear to consumers.”‍

Umbehr argues that rather than relying on transparency mandates that haven’t worked, lawmakers should fix the incentives that discourage hospitals from disclosing prices. 

Dr. Umbehr also speaks to how hospitals are incentivized not to post prices publicly.‍

“The answer is that Medicare pays them not to. Medicare reimburses a hospital-owned clinic more than an independent one for the same visit, and that payment gap has fueled a buying spree. In Kansas, 56.5 percent of hospitals now sit in highly concentrated or monopoly markets, and hospital systems have completed seven mergers since 2000 that regulators would flag as likely to raise prices. Hiding prices is all but necessary in a healthcare market with limited providers, and while transparency mandates fight that incentive, they don't remove it.”‍

Rather than focusing on federal price transparency mandates that haven’t worked, policymakers should think about how market signals and policies could achieve the same goals. Dr. Umbehr proposes a few of those below:‍

“Most hospitals are nonprofits already exempt from income and property taxes and receive discounted drug purchasing through the 340B program. Tying those benefits to posting real, usable prices would do more than any current regulation. At the same time, having those numbers match what the hospital reports to its bondholders and the IRS would make these errors more than a paperwork violation. Instead, it’s a misstatement to investors and the federal government that carries its own real penalties.”‍

Likewise, reworking how Medicare reimburses hospitals could help fix unwarranted consolidation of hospital networks – another key reason that hospitals fail to disclose prices. Making reimbursement rates “site-neutral” or equal regardless of the actual site of care, could help unwind a system that favors large hospital systems and encourages consolidation.‍

“[Senator Roger Marshall] said it himself at a recent press conference: ‘When you create real competition, prices come down.’ He's right. The lesson of the last five years is that competition doesn't come from a mandate. It comes from removing the reasons hospitals have to avoid it, rewarding the ones that don't, and pointing to the Kansas doctors who never needed telling.”‍

Mandating price transparency is one thing, but getting real prices that patients can work with is completely different. Understanding that difference is critical if policymakers want to strive for truly value-based care the patients can count on. 

You can read the full op-ed in the Topeka Capital-Journal here. 

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