By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Health Works CollectiveHealth Works CollectiveHealth Works Collective
  • Health
    • Mental Health
    Health
    Healthcare organizations are operating on slimmer profit margins than ever. One report in August showed that they are even lower than the beginning of the…
    Show More
    Top News
    physical health
    5 Ways Playing Games Can Improve Neural and Physical Health
    September 9, 2022
    Reasons For Hair Loss and Its Treatment
    Reasons For Hair Loss and Its Treatment
    February 16, 2022
    healthcare organization
    5 Actionable Strategies For Healthcare Organizations
    August 15, 2022
    Latest News
    7 Most Common Healthcare Accreditation Programs: Which Should You Use?
    August 20, 2025
    Hospital Pest Control and the Fight Against Superbugs
    August 20, 2025
    Hygiene Beyond The Clinic: Attention To Overlooked Non-Clinical Spaces
    August 13, 2025
    5 Steps to a Promising Career as a Healthcare Administrator
    August 3, 2025
  • Policy and Law
    • Global Healthcare
    • Medical Ethics
    Policy and Law
    Get the latest updates about Insurance policies and Laws in the Healthcare industry for different geographical locations.
    Show More
    Top News
    4 Reasons Chris Cornell’s Death Raises Medical Ethics Questions
    December 19, 2018
    What If You Could Sell Your Vote?
    August 24, 2017
    The Sleepy American
    September 12, 2017
    Latest News
    How Social Security Disability Shapes Access to Care and Everyday Health
    August 22, 2025
    How a DUI Lawyer Can Help When Your Future Health Feels Uncertain
    August 22, 2025
    How One Fall Can Lead to a Long Road of Medical Complications
    August 22, 2025
    How IT and Marketing Teams Can Collaborate to Protect Patient Trust
    July 17, 2025
  • Medical Innovations
  • News
  • Wellness
  • Tech
Search
© 2023 HealthWorks Collective. All Rights Reserved.
Reading: Price Transparency: What to Do and What Not to Do
Share
Notification Show More
Font ResizerAa
Health Works CollectiveHealth Works Collective
Font ResizerAa
Search
Follow US
  • About
  • Contact
  • Privacy
© 2023 HealthWorks Collective. All Rights Reserved.
Health Works Collective > Business > Finance > Price Transparency: What to Do and What Not to Do
BusinessFinanceHospital Administration

Price Transparency: What to Do and What Not to Do

John Graham
John Graham
Share
6 Min Read
SHARE

price transparencyI’ve written about sky-high hospital prices in this blog, especially for uninsured patients who present at emergency rooms. A related issue is price transparency. In most normal transactions, it is not hard to discover the price you will pay for a good or service.

price transparencyI’ve written about sky-high hospital prices in this blog, especially for uninsured patients who present at emergency rooms. A related issue is price transparency. In most normal transactions, it is not hard to discover the price you will pay for a good or service. Indeed, for most ordinary items, prices are posted and we do not even spend much time negotiating.

For much of health care, this is untrue. It is usually very difficult to learn the price of a service from a doctors’ office or a hospital before receiving treatment. Doctors and hospital managers will often reply that they don’t know what the right prices are either, because charges are subject to adjudication by insurers.

When uninsured (and, increasingly, insured) patients are shocked by bills they receive after treatment, they often balk at paying inflated charges. This results in bad accounts receivable for hospitals, which I have argued is a necessary pain to cause hospitals to change.

More Read

The Value of Connectivity in Healthcare
Dr. Anonymous: Blogger, Podcaster, Early Adopter [PODCAST]
Hospital Evacuation – it can and does happen!
Understanding the Patient Digital Search Process
A Four Step Guide to Creating Perfect Accreditation Policies and Procedures

While everyone outside the health sector agrees that more price transparency would be beneficial, others often propose solutions that increase government regulation. One example is a recent report written by the Pacific Business Group on Health (PBGH), a group of large employers in Northern California.

While the recommendations sound reasonable on their face, they invite more government intrusion in health care, with unintended consequences. Let’s examine the major proposals:

  • Prohibit gag clauses. “Gag clause” is a loaded term that PBGH uses to describe contract details between insurers and providers, such as physician groups and hospital systems. The “gag clauses” (which, by definition, no outsider sees) supposedly prevent the parties to the contract from disclosing the negotiated fees. However, it is not a feature of contract law that the government can disclose fees negotiated between private parties. When we buy a car, we don’t care how much the automaker paid its suppliers for parts. Those prices are not publicly disclosed, nor even disclosed to retail buyers. Prohibiting “gag clauses” distracts us from the fundamental problem of our health system: The patient and the paying customer are different parties.
  • Mandate All Payer Claims Databases (APCDs). This would force insurers to disgorge their claims data to entities established and maintained by state governments. This, PBGH asserts, would allow its members to easily understand the entire cost structure of the health system they are trying to negotiate. But why should taxpayers or insurers pay for this? If Safeway, for example, wants to estimate how much its competitors pay for groceries and sundries they stock, it hires a consultant. It doesn’t demand that the government establish a public database collecting cost data on the thousands of items supermarkets stock.
  • Assert employers’ “rights” to access their own claims data. Insurers do not generally share claims data with employers. To be sure, this is valuable information. There is nothing preventing employers from demanding such data when they contract with insurers. Indeed, large employers do not even contract with insurers to bear risk. They hire them only to process claims that are paid by the employer. PBGH claims that “market imbalance” prevents them from demanding this concession from insurers. If so, that simply demonstrates that employers might not always be the best place for individuals to acquire their health insurance. Access to claims data cannot be an employers’ “right”. If claims are the natural property of anyone other than the insurer, they belong to the patient, not her employer. After all, do you want your boss to know your detailed medical claims?

When it comes to health benefits, PBGH protests too much. It asserts that employees value health benefits (which we clearly do), but also lobbies for government to tilt the playing field even more in employers’ favor — implicitly admitting that employers don not necessarily have comparative advantage in providing health benefits.

Price transparency will surely lower prices and increase quality in health care. But it will come about by allowing patients more control over how we spend our health dollars, not by giving more power to our employers to make medical decisions for us.

(price transparency / shutterstock)

TAGGED:price transparency
Share This Article
Facebook Copy Link Print
Share

Stay Connected

1.5kFollowersLike
4.5kFollowersFollow
2.8kFollowersPin
136kSubscribersSubscribe

Latest News

travel nurse in north carolina
Balancing Speed and Scope: Choosing the Nursing Degree That Fits Your Goals
Nursing
September 1, 2025
intimacy
How to Keep Intimacy Comfortable as You Age
Relationship and Lifestyle Senior Care
September 1, 2025
engineer fitting prosthetic arm
How Social Security Disability Shapes Access to Care and Everyday Health
Health care
August 20, 2025
a woman explaining the document
How a DUI Lawyer Can Help When Your Future Health Feels Uncertain
Public Health
August 20, 2025

You Might also Like

Clinical trial data
BusinesseHealthFinanceMedical Records

Clinical Trials Software Firm Gets Funding to Help with Health Data Digitization

November 4, 2013

Health Start-Ups! – FDA-Cleared iPhone App Measures Balance As a Part of Concussion Screening

June 30, 2013
Image
BusinessPublic Health

Medication Sticker Shock

April 29, 2013

Medical Billing: A Paper Blizzard Not Addressed by EHR

May 25, 2013
Subscribe
Subscribe to our newsletter to get our newest articles instantly!
Follow US
© 2008-2025 HealthWorks Collective. All Rights Reserved.
  • About
  • Contact
  • Privacy
Welcome Back!

Sign in to your account

Username or Email Address
Password

Lost your password?