Examining State Efforts to Improve Transparency in Healthcare Costs for Consumers
Testimony of Jaime S. King before the Subcommittee on Oversight and Investigations of the Committee on the Energy and Commerce of the U.S. House of Representatives, Examining State Efforts to Improve Transparency in Healthcare Costs for Consumers, July 17, 2018. Available at:
36 Pages Posted: 8 Jul 2020
Date Written: July 17, 2018
The United States currently spends more than any other nation on healthcare, as a percentage of gross domestic product and per capita. Our healthcare markets suffer from high levels of consolidation, a lack of clear price and quality signals for consumers, and an inability to access price, utilization, and quality data. Price transparency initiatives, like all payer claims databases, can improve healthcare market functioning in all these areas by providing relevant information to decision-makers, including patients, providers, payers, and policymakers, at key decision points. Historically, most price transparency initiatives have focused on changing consumer behavior to encourage them to select providers and services that provide the greatest value at the lowest cost. Unfortunately, these initiatives have not been successful at bending the cost curve due to limited usage and mixed levels of effectiveness. Price transparency initiatives that provide patient, provider, procedure, and plan level of specificity on price and quality to consumers, accompanied by a financial incentive, like reference pricing or tiering, have proven more effective. However, even with these potential improvements, legal barriers including contractual provisions, ERISA preemption, and trade secrets laws continue to hinder the utility of many existing price transparency initiatives. Congress, more than any other entity, has the ability to address the most significant barriers to price transparency in healthcare and maximize the tremendous untapped potential of existing state initiatives, in particular APCDs. To do so, Congress should narrow ERISA preemption to exclude state health reform efforts that do not unduly burden ERISA’s goal of uniformity for employer-based benefit plans, while also granting states sufficient flexibility to achieve their health reform goals.
Keywords: price transparency, healthcare markets, healthcare reform, state initiatives,
JEL Classification: I:00, I:1, I:10, I:11, I:13, I:18, I:19, P:36, P:46,
Suggested Citation: Suggested Citation