Wisconsin can improve price transparency, lower healthcare costs
The News: A new study from the Wisconsin Institute for Law & Liberty (WILL) finds that states with better healthcare price transparency have lower healthcare costs. The finding is critical, and lends support to state and federal efforts to foster price transparency in healthcare as a way to lower costs and increase consumer choice.
The Study: WILL’s newest Solution Series policy brief titled Can More Sunshine on Healthcare Pricing Lower Costs? by Research Director Will Flanders PhD, and Writer and Research Associate Jessica Holmberg examines the current state of price transparency in healthcare and tests the cost of healthcare against state price transparency laws. Using four years of data from the Centers for Disease Control and state rankings of price transparency from Catalyst for Payment Reform, WILL performed a statistical analysis to isolate the effect of price transparency on healthcare costs. The findings are clear:
- WILL found that states with better transparency laws had about 7% fewer survey respondents reporting that they could not afford care.
- This is consistent with a recent study of New Hampshire’s price transparency website, which estimated that patients have saved approximately $7.9 million over the first five years of the website.
WILL Solutions: If fostering greater price transparency results in lowering the cost of healthcare, lawmakers can get to work achieving this goal. This effort can take place in Washington D.C. and Madison.
- Wisconsin can foster greater healthcare price transparency by improving the current PricePoint system, an All Claims Paid Database, to include more information about the cost of routine and elective services and what consumers with various health insurance policies can expect to pay.
- At the federal level, Congressman Mike Gallagher has authored bipartisan legislation that requires healthcare providers to disclose prices in person, online, in print, and at the point of purchase. The goal is to eliminate surprise billing and foster greater consumer choice.
The Quote: Research Director Will Flanders said, “Encouraging healthcare price transparency is a critical tool for policymakers focused on tackling the rising cost of healthcare. Consumers always deserve to know what they are paying for. But we also know that when information about prices are available, consumers shop and providers compete, lowering costs and increasing quality.”