Price Transparency: What Is It? (Part 1 of 5)

In “Health Care Price Transparency” (September 2011), the U.S. Government Accountability Office (GAO) described its four key features:

1) “Transparency” means that price information is available before a health care consumer (patient) receives care. Sadly, most patients don’t ask about price until after they’ve received treatment and gotten a bill.

2) “Price” reflects any negotiated discounts between a health system and health plan. In reality, most contracts prohibit sharing such information, and providers can publicize only charges or average prices.

3) “Price” includes all costs to the consumer associated with a service, including hospital, physician, and lab costs. Unfortunately, most health care providers bill individually as separate entities.

4) “Price” identifies a consumer’s out-of-pocket cost, which includes deductible, co-pay, co-insurance, and out-of-pocket limit; however, few health care providers have access to this information.

So why is price transparency in health care important?  Check back for Part 2 of this series to learn more.