N.C. Introduces a Bill to Use Its HIE to Increase Price Transparency

NCHIEThe North Carolina state senate introduced a bill last week that would require hospitals to publish prices on their web sites for the 50 most common procedures offered. In addition the bill would have every hospital post its charity care policy online.

Health care prices are difficult to report, as the same procedure can cost different amounts for different people depending on their payer. To account for those differences, starting Jan. 1, 2014, hospitals would need to report prices charged for uninsured patients, Medicare and Medicaid patients, and prices for those covered by the state’s five largest health insurers.

If the bill called “HealthCare Cost Reduction & Transparency” passes, information will be made available on the North Carolina Health Information Exchange web site. The senators who introduced the bill aim to make prices transparent to the general public. As for making charity care information available — it would be posted on the hospital’s webpage — their goal is to make sure that charity care doesn’t go underutilized.

Though increased transparency doesn’t hurt patients, it remains to be seen if it will benefit them the way that many hope. An argument for positing prices online is that it will give consumers an opportunity to shop for health care, something they can’t do now with the lack of information on prices. Making prices easily comparable puts hospitals in competition with one another, and a competitive market can result in lower prices.

However this bill is focused on acute care, and it’s easy to image a few ways that the competitive market theory won’t work in this case. First, in emergency situations patients can’t take the time to shop for care. Second, though new consumer-centered health plans are meant to encourage patients to pay close attention to health care prices, often this only works when patients shop for low-cost procedures.

If a patient has a $3,000 deductible, he has an incentive to shop for all of his health care costs under that amount. For this reason health care price transparency company Castlight Health recently introduced Castlight Pharmacy to help patients make decisions about their prescription medications based on cost. But if the patient’s procedure amounts to more than $3,000, he is covered by his insurer and is less likely to worry about the price of his care.

That’s not to say that health care prices should remain opaque. If the bill passes, it will be interesting to see what if any impact it will have on patient spending. North Carolina would be the first state to use its HIE to increase cost awareness, according to Government Health IT.

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