The Secret of Healthcare Prices: Why Transparency is in the Public Interest

Katherine L. Gudiksen, Samuel Chang, & Jaime S. King (2019) The Secret of Healthcare Prices: Why Transparency is in the Public Interest, California Healthcare Foundation

26 Pages Posted: 9 Jul 2020

See all articles by Katherine Gudiksen

Katherine Gudiksen

UCSF/UC Hastings Consortium on Law, Science & Health Policy

Samuel Chang

affiliation not provided to SSRN

Jaime S. King

Faculty of Law, The University of Auckland

Date Written: July 16, 2019

Abstract

In 2018, California lawmakers sought to design and create a state Health Care Cost Transparency Database, an all-payer claims database (APCD), to collect information on the cost of health care in the state. The law tasks the Office of Statewide Health Planning and Development (OSHPD) with designing a database to best fit the needs of the state. Of specific interest for this project, California’s APCD may collect information about amounts paid for health care services, including data about negotiated rates between insurance plans and providers. Many health care providers and payers seek to maintain the confidentiality of these paid amounts as trade secrets, claiming their secrecy provides a competitive advantage. Yet the public has begun to demand greater price transparency in health care.This report examines the legal and economic implications of collecting and releasing these paid amounts, reviews the practices of existing APCDs, and concludes with recommendations for California’s policymakers about best practices to ensure the effective use of increased transparency to control costs and increase access to health care services.

Keywords: health care prices, all-payer claims database, insurance, price transparency, trade secrets, negotiated rates, competition, antitrust

JEL Classification: H75, I00, I1, I11, I13, I18 I19, K32, P46

Suggested Citation

Gudiksen, Katherine and Chang, Samuel and King, Jaime S., The Secret of Healthcare Prices: Why Transparency is in the Public Interest (July 16, 2019). Katherine L. Gudiksen, Samuel Chang, & Jaime S. King (2019) The Secret of Healthcare Prices: Why Transparency is in the Public Interest, California Healthcare Foundation, Available at SSRN: https://ssrn.com/abstract=3470844

Katherine Gudiksen

UCSF/UC Hastings Consortium on Law, Science & Health Policy ( email )

CA
United States

Samuel Chang

affiliation not provided to SSRN

Jaime S. King (Contact Author)

Faculty of Law, The University of Auckland ( email )

Private Bag 92019
Auckland Mail Centre
Auckland, 1142
New Zealand

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