43 states flunk when it comes to healthcare price transparency, groups say

The majority of states could be doing more to make price transparency the norm and enable educated healthcare choices for consumers, according to a joint report from the Health Care Incentives Improvement Institute and Catalyst for Payment Reform, two independent health policy groups.

In fact, 43 states were stung by failing grades for not meeting minimum standards, while only New Hampshire, Maine, and Colorado scored A's for "providing detailed pricing on a variety of procedures through easy-to-use public websites, backed by rich data sources," the groups said. Several other states received B's or C's.

Now in its fourth year, the 2016 Report Card on State Price Transparency Laws, released Tuesday, identifies the states failing at healthcare price transparency, shows the few that are on track, and also highlights practices struggling states should enact to do better. It offers policymakers, advocates, and other key healthcare stakeholders a comprehensive look at the progress, if any, being made on price transparency at the state level.

"Real healthcare price transparency for consumers is dependent on rich data sources that provide meaningful price information on a wide range of procedures and services," said François de Brantes, HCI3 executive director and lead author of the report. "But that's not enough. It must be presented on an accessible, publicly available website."

The annual report card assigns grades based on the availability of accurate and usable price information as well as access to the information through a "well-designed public website." Analysts at The Source on Healthcare Price and Competition -- a program of the University of California, Hastings College of the Law and the University of California, San Francisco -- conducted legislative research on healthcare price transparency laws in all 50 states. For each state that has mandated price transparency, The Source compiled relevant excerpts from the legislation and details on the scope of the laws. HCI3 analyzed the legislation, scored it on the parameters summarized above and assigned a corresponding letter grade, A through F.

States were evaluated based on the presence or lack of several components. First, a rich data source is required for high marks. The report explained states could compel providers/health plans to report prices or mandate an all payer claims database, or APCD. These collect data from multiple sources including private insurers, authors said.

[Also: Offering price transparency tools does not equal lower healthcare spending, JAMA study says]

"APCDs are widely considered to be superior data sources because they include actual paid amounts--not charged amounts--which often are significantly lower due to contracted or negotiated rates from providers. When there is no APCD, typically only charged amounts are available in the data turned over from providers to states or consumers, making the price information significantly less useful for comparisons," the report said.

Second, meaningful use of price information refers to the preferred use of a paid amount, or actual amount customers paid for services, which report authors said is a more useful than knowing the charged amount. This standard was referred to as "scope of prices". 

"Scope of provider" referred to a customer being able to see the full price for a healthcare event as opposed to seeing only the hospital/facility price or only the physician's price for a specific service.

"Scope of procedure and services" rated the presence of a "robust set of price data that will include information on inpatient and outpatient procedures and services, instead of just one category, or only a limited list of procedures and services."

[Also: Price transparency an important factor in cutting healthcare costs, study finds]

Finally, states were rated on the presence of an accessible, mandated website. Some transparency laws stipulate only that a state prepare a report using price data, or that the data be provided upon request to consumers. A good, legally required transparency resource, the report said, will make collected data available on a website and ensure that the content is up to date and that tools are easy to use. Additionally, the site should be legally mandated and therefore safeguarded from "the varying priorities or funding of the agency publishing it," authors wrote.

At a glance, New Hampshire, Colorado and Maine each received an A due to the increased quality of their reporting and transparency websites. Oregon received the only B in 2016, up from an F last year because of its sustained efforts to improve this year. Vermont and Virginia a scored C's this year and Arkansas barely passed with a D. The remaining states received failing grades.

But authors cautioned that "not every F is created equal."

"For instance, both Louisiana and Washington enacted new all-payer claims database legislation, but do not yet have functional websites publishing the price information they collect. If those websites are well designed and online next year, these states would expect to see their grades rise markedly." 

Twitter: @BethJSanborn