Employers, Unions Jointly Demand Health Care Price Transparency

Employees who feel completely mystified by the prices they’re charged for medical procedures might be surprised to know their employers feel the same way. On Thursday, a consortium of major companies and labor unions, including GE, Wal-Mart, Boeing and the AFL-CIO issued a manifesto demanding price transparency from both health care providers and insurance companies.

Consumers “have the right to know the price and quality of their health care choices,” the consortium said in a statement — especially as health care costs continue to rise and high-deductible health care plans become more common.

For decades, consumers have been effectively blocked from learning the true price of medical procedures until the bill came due, with no chance to shop for a better deal, according to the consortium, which is represented by the nonprofit Catalyst for Payment Reform (CPR). Even employers with access to claims records still struggle through data thickets to learn what individual procedures cost at different hospitals and clinics. High-deductible insurance plans — often set at $1,000 or $2,000 — are increasing the demand for greater transparency.

In response, insurance companies have created online “tools” to help consumers compare medical providers based on price and quality.

But CPR Executive Director Suzanne Delbanco said employers find many of those tools “clunky” to use and lacking sufficient price and quality data. In addition, many insurance contracts with employers ban them from sending data for analysis to a third party, who might also offer advice or build better tools. Thus far, the insurance companies, which she declined to name, have not budged on the ban.

Delbanco said it’s time to “make a stink about this” because the third-party ban is stifling innovation that could help consumers shop for medical care based on price and quality. More innovative tools, she said, “might even inspire the (insurance companies) to work harder on their own tools.”

Another group representing corporate health care payers and working with CPR, the Pacific Business Group on Health, has issued critiquesof insurance company shopping tools, with suggestions for improvement.  CPR on Thursday released guidelines to help employers and consumer groups make their own assessments.

Self-insured employers, which includes most large companies, also “have the right to use their claims data to develop benefit designs and tools that meet their needs,” the statement said.

Besides large corporations, the consortium includes government entities like the California pension provider, CalPERS. The AARP also signed on to the statement.

“If you get enough critical mass of customers all asking for something at the same time, it helps create a business case for the health plans to change the way they’ve been doing things,” Delbanco said.