Transparency Yields Results

It was only a matter of time before the benefits of hospital price transparency became evident. Recently, the St. Louis Area Business Health Coalition released a report showing that some hospitals in the St. Louis region may be overcharging their patients.

According to the report, most hospitals in the St. Louis region are charging above what is considered a "fair price," with BJC hospitals charging the most. To determine what was "fair," the report used guidelines established by the National Alliance of Healthcare Purchaser Coalitions. The coalition determined that any rates below 200% of what the federal government reimburses for Medicare to be "fair." This is a bar that not many hospitals in the area are able to clear (see graphic above).

Of course, not everyone pays the price that hospitals charge, and some hospitals in the region do offer lower or more "fair" prices. But what shouldn't get lost in this discussion is that assembling a report like this that includes pricing data for every hospital in the St. Louis region would have been nearly impossible if not for the federal price transparency rules that went into effect in 2021.

I've written several times over the past year about the benefits of price transparency in the healthcare sector and suggested that Missouri should go further than the feds to maximize transparency. As of early 2023, fewer than half of Missouri's hospitals were in full compliance with the federal transparency requirements years after the rules went into effect. Unfortunately, even fewer were posting their data in a format that was consumer friendly for patients to access and understand.

Even though the report's authors were able to navigate their way through the federal data to generate findings for the St. Louis region, the process is still too difficult to expect the average Missouri patient to do the same. That's why Missouri should, in addition to establishing its own price transparency requirements, follow the leads of many other states in creating its own web-based tool to make it easy for every patient to learn the prices of the care they'd like to receive prior to receiving it.

None of this is to say that simply requiring hospitals to publish their prices will be enough to immediately drive down costs, or entirely fix our broken healthcare system, but it's an essential step toward making healthcare more consumer friendly.

Given that a coalition of businesses paid for this report, employers clearly want to be able to compare prices between providers, and that is something patients should be able to do as well. Hopefully, Missouri's general assembly agrees, and lawmakers decide to make hospital price transparency a priority when they return to Jefferson City in 2025.