Employer Health Plans Navigate Transparency Surge in Hospital Pricing Data for Cost-Effective Care Strategies

This rise in data availability sheds light on significant cost variations among different health insurance carriers or employer health plans negotiating with the same hospitals.

Employer health plans are being empowered with increased access to data services, facilitating the comparison of prices paid to hospitals for various medical treatments

Cynthia Fisher, the founder of Patient Rights Advocate, emphasized the substantial price discrepancies, urging employers to take notice. This awareness, stemming from tools like the hospital pricing search introduced by Patient Rights Advocate, exposes disparities like a cancer drug injection at Rush University Medical Center costing $899.33 under one employer health plan while reaching $9,260.13 under another.

This information becomes pivotal for employers’ fiduciary responsibility, compelling them to scrutinize negotiated rates to ensure fair pricing within employer health plans. The push for transparency aligns with regulations by the Centers for Medicare & Medicaid Services (CMS), mandating hospitals to disclose standard charges and employer health plans to make negotiated rates public.

Despite CMS enforcing standardized data reporting, challenges persist in consumer uptake of this information

While hospitals show improved compliance, the utilization of this data by healthcare consumers remains limited. Employers, however, are slowly acknowledging their responsibility in analyzing this wealth of data. Still, obstacles arise from third-party administrators impeding access to essential pricing data, hindering employers’ efforts to fulfill their fiduciary duties.

Efforts by organizations like the Employers’ Forum of Indiana, offering tools like Sage Transparency, aim to combine price and quality data for employers. Meanwhile, companies like Turquoise Health are compiling extensive price data, unveiling previously unseen disparities in costs for various healthcare services.

The availability of price transparency empowers employers to make informed decisions, potentially revolutionizing how they select cost-effective options for their employees within the employer health plan landscape. This shift towards informed decision-making could mark a significant step in reshaping healthcare economics for both employers and employees.